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June 1, 2022updated 08 Jun 2022 3:33pm

Spain’s Cerealto Siro Foods to close biscuit factory

The facility in Venta de Baños in Palencia province will be shuttered over the next two years.

By Andy Coyne

Cerealto Siro Foods, the Spain-based co-manufacturing and private-label business, is to close a domestic biscuit factory, it has announced.

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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The facility in Venta de Baños in Palencia province will be shuttered over the next two years and “entails the relocation of 100%” of the 197-strong workforce to other group factories in Castilla y León”, the biscuits and pasta maker said.

Cerealto Siro said the closure is part of a “competitiveness plan” revealed in March.

The company said then it was in talks with staff representatives over a plan to improve competitiveness with an aim to “reduce its excess fixed costs”. The company had recently sold factories in Spain to Grupo Bimbo, the Mexican bakery giant, and to local business executive Felix Gullón.

The news of those talks came as it was revealed private-equity firms Davidson Kempner from the US and Turkey’s Afendis Capital Management had teamed up to buy a majority stake in Cerealto Siro Foods, which is reputed to have debts of EUR300m (US$320.3m).

The company told Just Food at that time: “We are not working on plans to reduce headcount or close plants, but rather to meet the goals of our strategic plan.”

But in its Venta de Baños closure announcement, Cerealto Siro Foods said the competitiveness plan – which involves the plant closure – is an essential requirement for the investors.

It said: “The entry of the investor partner as the majority shareholder of the company is conditioned to the signing of the competitiveness plan that must be closed in the next few days, and, if it does not occur, will imply the immediate withdrawal of the offer by the investor partner.”

Local media reports suggested Cerealto Siro Foods has been negotiating for months with the works councils of its factories to accept this plan as a prelude to the entry of foreign capital but has yet to gain the backing of employee representatives in all of its plants.

The reports also quoted a letter sent by Madrid-based Cerealto Siro Foods to one works council that said the Venta de Baños plant was unviable because of higher salary costs and greater absenteeism rates than at its other facilities.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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