Premier Foods is to split its milling business into two divisions to strengthen its focus on supplying flour to third parties.
As part of the restructure, which was announced today (10 July), the company is planning to close its mill in Barry, Vale of Glamorgan, by the end of October, resulting in the loss of 43 full-time employees and a number of local contractors.
A dedicated management structure will be established to oversee the company’s Rank Hovis free-trade business, which sells flour to third parties, and will largely be serviced by the Premier sites in Southampton, Manchester and Newbridge.
“It’s not possible to continue on the current path given excess capacity in the marketplace”
Bob Spooner, Premier Foods
Its 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 operation that includes the Hovis bread brand, own-label bread, and cakes.
Premier said it was investing about £1m in improving its Southampton and Wellingborough sites as part of the reorganisation.
“The Rank Hovis business has over 100 years of history in British milling with significant scale, expertise and knowhow,” said bread division MD Bob Spooner. “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 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 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.”
This proposed reorganisation is the latest step in Premier’s plans to rebuild value in its bread and milling business, with the restructuring expected to cost around £28m.
Speaking to The Grocer in April, Premier CEO Gavin Darby said the company was “getting off the merry-go-round” of chasing volume in bread.