Premier Foods plc is to close a facility in Wales as part of a reorganisation of its milling business.
The closure of the plant in Barry is the result of a review of the firm’s milling capacity and demand. The Vale of Glamorgan plant will be phased out over the coming months with final closure expected by the end of October.
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The reorganisation will see Premier’s milling business split into two parts to “strengthen focus” on its free trade, or third-party, customer base while vertically integrating its remaining milling operations into its baking and grocery businesses.
Bob Spooner, MD of Premier’s bread division, said of the plans: “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.”
A new management structure is to be established to oversee the firm’s Rank Hovis free trade business. This will be largely serviced by the company’s sites in Southampton, Manchester and Newbridge. The 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 business.
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By GlobalDataPremier said it will invest around GBP1m in improving the capability of its Southampton and Wellingborough sites as part of the re-organisation.
The moves are the latest steps by Premier to re-build value in its bread and milling business, which saw sales slide 0.7% for its full-year in February. Changes to customer and product mix, contract losses and poor wheat quality have all impacted results.
