Premier Foods embarks on milling reorganization
July 12, 2013
by Eric Schroeder
LONDON — Premier Foods P.L.C., maker of Hovis bread and Mr Kipling cakes, said it will close its 109-year-old flour mill at Barry Docks in the United Kingdom by the end of October. The move, which will eliminate 43 jobs, comes about three months after the company closed its mill in Glasgow, Scotland.
The mill closings are part of a broader initiative at Premier in which the company is reorganizing its milling business into two parts. One part will be dedicated to the company’s production of flour for supermarkets and other food manufacturers under the Rank Hovis brand. U.K. mills in Southampton, Manchester and Newbridge will serve that part of the business, Premier said.
The second part of the company’s milling business will comprise U.K. mills in Wellingborough, Selby, Andover and Gainsborough, and will be organized into a vertically integrated flour supply business for Premier’s baking and grocery business.
“The Rank Hovis business has over 100 years of history in British milling with significant scale, expertise and know-how,” said Bob Spooner, managing director of Premier Foods’ bread division and group supply chain director. “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 recognize 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.”
Premier said the proposed reorganization is the latest step in the company’s plans to re-build value in its bread and milling business that began in 2012. The expected costs associated with the restructuring of the business announced last year will remain unchanged at approximately £28 million ($42.5 million), Premier said. The costs associated with the proposed closing of the Barry mill will be absorbed into this.