Premier Foods has announced plans to split the management structure of its milling business and close a mill in Barry, Wales.
The company said it would be setting up a “dedicated management structure” to oversee Rank Hovis’ free trade business – and would “vertically integrate” its remaining milling operations into its bakery business.
The move will see third-party business served by mills in Southampton, Manchester and Newbridge and internal milling requirements will be serviced by Wellingborough, Selby, Andover and Gainsborough.
The mill at Barry in the Vale of Glamorgan will be closed by the end of October 2013, resulting in the loss of around 43 employees plus a smaller number of local contractors.
Bob Spooner, managing director of Premier Foods’ bread division and group supply chain director, said: “The Rank Hovis business has over 100 years of history in British milling with significant scale, expertise and know-how. 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 recognise 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 Foods said the reorganisation was the latest step in the company’s plans to re-build value in its bread and milling business. The expected costs associated with the restructuring of the business, announced last year, will remain unchanged at approximately £28m and the costs associated with the proposed closure of the Barry mill will be absorbed into this.