Own-label chilled foods firm Uniq is set to jettison its unprofitable everyday desserts business with the loss of 350 jobs.
Uniq, which looks set to be acquired by Irish food group Greencore, will scale back production at its business unit in Minsterley and transfer certain premium desserts to its Evercreech site in the first half of 2012.
The Evercreech facility, having already stopped making cottage cheese earlier this year, will now only produce premium desserts, such as the chilled desserts range sold at MARKS AND SPENCER.
Around 100 staff will remain at Minsterley to focus solely on the desserts Uniq makes under licence for Müller and Cadbury.
The total cash cost of this restructuring is estimated to be approximately GBP10m (US$16.6m), including capital investment.
Shore Capital analyst Darren Shirley said Uniq’s decision to quit everyday desserts was a “welcome piece of tidying up” despite the business being worth GBP36m in sales.
However, Shirley said it was a “surprise” that the Minsterley site would remain open after what he described as an “extensive plant rationalisation”.
Shirley also questioned whether Uniq’s desserts business would ever benefit Greencore.
“We remain somewhat sceptical as to whether the desserts operation of Uniq can ever make a materially positive contribution to the combined Greencore/Uniq group, albeit with this additional restructuring, there may now be a better basis to at least expect an improvement,” he said.
“That said, the main prize of the acquisition of Uniq by Greencore is not Uniq’s dessert operations but its food-to-go operations. The sandwich, salad and prepared foods element of Uniq, the acquisitions of which remains subject to competition clearance, gives Greencore a materially better representation with Marks and Spencer, plus scope for material cost benefits in procurement, central overheads and production costs, whilst materially bolstering medium term cash generation.”