Premier Foods to close six factories
will close six of its 11 factories in a bid to cut manufacturing
costs.
The move comes amidst hightened competition in the market, with mergers and acquisitions increasing as food and beverage companies attempt to achieve operational savings and boost their share in particular segments. Premier Foods said the decision was made after a review of its UK manufacturing facilities following the completion of its £1.2bn (€1.8bn) takeover of RHM on 16 March 2007. Last year the company bought Campbell's soup business for £460m (€682m). The review covered Premier's ambient factories and RHM's culinary brands and preserves factories. Premier said the cuts aim at optimising efficiency across its manufacturing network and expects to save £28m (€41.5) from integrating Campbell's operations and another £85m (€126m) in swallowing RHM. The consolidation is expected to result in job cuts of about 900 workers from its 20,000 strong workforce. Premier said it will its will "invest significantly" in the remaining five plants. The investment aims at focusing dry food production on three major sites in Worksop, Knighton and Ashford. The company will focus preserves and spreads production in Histon and move the manufacture of chutneys, pastes and cooking sauces to Bury St. Edmunds in Suffolk. Desserts for the foodservice industry will take place in Knighton. The six factories to be closed are in Bristol, Droylsden, Ledbury, Middlewich, Reading, and Wythenshawe. The company expects the six will all be closed by early 2009. Last year the company said it would close a Campbell's soup factory in King's Lynn. Consultation on the proposals will begin immediately with affected employees, said Robert Schofield, Premier's chief executive. "Our priority continues to be growing our business and our brands and to do this we need to remain competitive in the market place," he stated. "These proposals will enable us to enhance our efficiency whilst giving us the capability to drive our branded sales growth." Premier had sales of £2.7bn (€4bn) in 2006. It produces Hovis bread, Mr Kipling cakes, Sharwoods Asian foods, Oxo stock cubes, Batchelors soups and noodles, Loyd Grossman sauces, Bisto gravy, Quorn meat-free products, Ambrosia custard and rice pudding, Branston pickle and Hartley's jams and marmalades and jelly. The company's top ten brands alone have retail sales of over £1.1bn.(€1.6).
