Premier Foods is to reorganise its milling business into two parts to strengthen its focus on its third-party customer base, while vertically integrating its remaining milling operations into its baking and grocery businesses.
The company is also planning to close its mill located in Barry, Vale of Glamorgan, by the end of October 2013. The move, it said, would help to align capacity with current market demands.
A new dedicated management structure is to be established to oversee the Rank Hovis third-party business. This will be largely serviced by the company’s sites in Southampton, Manchester and Newbridge.
The remaining mills in Wellingborough, Selby, Andover and Gainsborough will be organised into a vertically integrated flour supply business for the company’s baking and grocery business, said Premier Foods.
Around £1million has been earmarked to improve the capability of the Southampton and Wellingborough sites as part of this re-organisation.
The Barry closure is to be phased over the coming months with final closure expected by the end of October 2013, resulting in the loss of around 43 employees plus a smaller number of local contractors.
“By creating a dedicated structure aligned to our Rank Hovis customers, we will be able to improve further our customer focus and service levels,” said Bob Spooner, managing director of Premier Foods’ bread division and group supply chain director.
“It’s also critical that we take the tough decisions necessary to improve the longer term profitability and sustainability of the milling business by aligning our capacity to market needs.”
“We recognise the impact this proposal will have for our employees in Barry and we thank them for their contribution over the years. However, it’s not possible to continue on the current path given excess capacity in the marketplace.”