Premier to close two factories in bid to cut costs
down two of its factories over the next six months, cut about 450
jobs and invest in making three of its plants more efficient.
Like other European processors, Premier Foods has been battling low margins due to price pressures from the major retailers.The company plans to close the two factories and update production facilities at its remainingplants, said company chief executive Robert Schofield.
"Our proposals are underpinned by significant investment in plant and equipment, at ourother manufacturing sites, intended to give us the flexibility to meet future growth ambitions andchanging consumer trends and to ensure that Premier Foods remains competitive in the UK marketplace,"he said.
Premier Foods produces brands such as Branston Pickle, Crosse & Blackwell cooking sauces andQuorn. The company said it will close its Kings Lynn factory in Norfolk by the end of December 2007. A factory at Ashford, Kent will be put out of commission by May 2008. The company expects to save around£28m a year after three years as a result of the two plant closures.
The company will make investments and create jobs at three of its other sites in Long Sutton in Lincolnshire, Wisbech in Cambridgeshire and Worksop in Nottinghamshire.
The Kings Lynn factory currently employs 245 people. The Ashford factory currently employs 195 people.Schofield said about 150 new jobs will be crated in Wisbech and Long Sutton. About 60 jobs would be created at the Worksop factory.
Schofield said the restructuring decision was made after the company's £460m acquisition of Campbell's UK business in August 2006.The company plans to put marketing investment to reinvigorate brands such as Oxo, Batchelors andHomepride.
Premier Foods also announced it is buying Chivers Ireland, which supplies preserves to Irish retail grocery and food service markets.Chivers had gross assets of £24.5 million pounds at the end of 2005. The companies did not disclosethe sale price.
Premier Foods will combine Chivers with the existing Premier Foods Ireland operation in Irelandto create a single entity. This was formed in August 2006 following Premier's acquisition of Campbell's SoupsIreland.
