Allied's investment could reap dividends

27 July, 2012
Page 4 

Allied Bakeries' investment in its plants and equipment could help position it as one of the most efficient UK plant bread manufacturers, according to a leading City analyst.

This month, the Kingsmill brand owner, part of Associated British Foods (ABF), announced it would look to update both production and packaging lines at a number of its UK plants as part of a multi-million-pound project.

The firm has completed a series of updates in the north, including the installation of new flour silos at its West Bromwich facility in the West Midlands, and will continue to update its facilities in the south.

Dr Clive Black, head of research at Shore Capital, told British Baker: "For ABF, committing to Allied Bakeries as one of the three big players in the UK bread market, suggests it is looking to improve on its competitors from a cost perspective on an ongoing basis. That investment and what it means in terms of cost leadership will probably mean that, alongside Warburtons, Allied Bakeries will be the most efficient in the industry and this augurs greater pressure points for Hovis."

Allied Bakeries said it will also be investing in its current workforce of around 4,000 employees and will look to provide training on new technology, as well as broadening their skills base, to help improve efficiency within the business.

The company would not comment on whether it would look to move into the exports market, which rival bread manufacturer Warburtons has recently pursued within Europe.

Nicholas Law, operations director at Allied Bakeries, said: "We are delivering new plants across the majority of our bakeries upgrading the oldest and the least efficient to make sure we are making the most of the new technology available. Having this new kit means we can reduce waste, maintain better control of our processes and manufacture a consistently high-quality product."





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