Dairy Crest is set to close its production facility in the English town of Totnes, a move that could lead to the loss of 164 jobs.
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However, the company said the decision to stop production at the site is not the consequence of a poor performance from the UK dairy group’s liquid milk division.
The company has commenced a 90-day consultation process with employees and unions. This will be completed in mid-August, a spokesperson for the company told just-food today (14 May).
The spokesperson added: “When the consultation process is concluded, we expect to announce a timetable for closure. This is expected to be completed by November at the latest.”
The decision to close the site comes following the completion of a strategic review of the group’s liquid milk business. The move, Dairy Crest said, arose from the fact that the facility requires modernisation but lacks scope for future expansion.
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By GlobalData“Our strategic review looked at the site,” the spokesperson said. “We found that. in order to have a viable future, the facility required modernisation. However, the dairy is landlocked – surrounded by a train station, waterfront and houses – meaning that there is no room for future growth.” Manufacturing will be transferred to other UK production sites.
The closure of the Totnes facility is expected to result in exceptional costs of GBP3m (US$5.9m) and an exceptional non-cash asset write-down of GBP3m in the year ending March 2008.
Shares in Dairy Crest dropped 0.59% following the announcement, declining to 670 pence as just-food went to press.
