Premier Foods plc Reorganisation of Milling Business (0037J)
July 10 2013 - 5:08AM
UK Regulatory
TIDMPFD
RNS Number : 0037J
Premier Foods plc
10 July 2013
For immediate release
Premier Foods plc
10 July 2013
Premier Foods plc ("the Company")
PREMIER FOODS ANNOUNCES REORGANISATION OF MILLING BUSINESS TO
STRENGTHEN CUSTOMER FOCUS AND ADJUST CAPACITY TO MARKET
-- Barry Mill Closure Proposed
-- Restructuring guidance for 2013 unchanged
Premier Foods today announces it is to reorganise its Milling
business into two distinct parts to strengthen focus on its free
trade (third party) customer base while vertically integrating its
remaining milling operations into its baking and grocery
businesses. In addition, it is proposed to close the Company's mill
located in Barry, Vale of Glamorgan, by the end of October 2013 to
align capacity with current market demands.
In future, a dedicated management structure will be established
to oversee the Company's Rank Hovis free trade 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.
The Company will invest an additional c.GBP1million in improving
the capability of its Southampton and Wellingborough sites as part
of this re-organisation although the overall Group guidance on
capital expenditure remains unchanged.
Following a review of current milling capacity and demand, it is
also proposed to close the Company's mill located in Barry. This
will 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.
Commenting on the reorganisation plans, Bob Spooner, Managing
Director of Premier Foods' Bread Division and Group Supply Chain
Director, said:
"The Rank Hovis business has over 100 years of history in
British milling with significant scale, expertise and know-how. By
creating a dedicated structure aligned to our Rank Hovis customers,
we will be able to improve further our customer focus and service
levels."
"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."
Consultations with the employees in Barry will begin over the
coming days.
This proposed reorganisation is the latest step in the Company's
plans to re-build value in its Bread and Milling business begun in
2012. The expected costs associated with the restructuring of the
business announced last year will remain unchanged at approximately
GBP28 million. The costs associated with the proposed closure of
the Barry mill will be absorbed into this.
<ends>
For further information please contact:
Premier Foods plc
Richard Johnson, Corporate Affairs Director +44 (0) 1727 815
850
Richard Godden, Head of Investor Relations +44 (0) 1727 815 850
Maitland +44 (0) 20 7379 5151
Tom Buchanan
Tom Eckersley
This information is provided by RNS
The company news service from the London Stock Exchange
END
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