Premier Foods to shut two bakeries, 900 jobs to go

20 November, 2012

Under-fire Premier Foods, the food giant behind the Hovis brand, has this morning announced plans to shut two of its bakeries, with the loss of 900 jobs.

The company, which is believed to be looking for a potential buyer for its bread business, said the closures of sites in Birmingham and Greenford were a further step to “build value in bread”.

It is also planning on withdrawing 130 distribution routes, because of its loss of a contract withThe Co-operative, which will lead to the closure of operations in Greenford, Birmingham, Mendlesham and Plymouth.

Michael Clarke, chief executive of Premier Foods, said: “Having generated solid growth momentum in our Grocery Division, it is critical that we act to assure the long-term future of the Bread Division.

“By simplifying our cost base, we can increase focus on improving efficiency, quality and service levels to help grow our core Hovis business. We recognise the impact these actions will have for our employees at the sites affected. Decisions will not be taken lightly, but they are necessary if we are to build a strong and successful future for the Bread Division and those who remain with our business.”

Premier said the cost of the restructure would be £28m, with the majority of the cash charges coming in 2013, but added that it expected to “recover the majority of the cash impact”.

It said: “On a pro forma basis, the savings from the proposed restructuring are expected to offset the margin forgone from the lost bread contract. These proposals are not expected to have an impact on 2012 trading profit.”





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