A unit of Germany’s Premium Food Group is closing a manufacturing plant and switching production to another local site.

The Zur Mühlen Group plans to shut down the Schulte meat products facility in Dissen, Lower Saxony, and transfer operations to its Versmold, Loxten factory, according to a statement from the former Tönnies Group.

Some 230 staff employed at Dissen will move to the Loxten plant, which is run by another Premium Food business, The Family Butchers (TFB). The two factories are only around nine kilometers apart.

A spokesperson for Premium Food confirmed the Loxten site is due to close in the first half of the new year.

Once completed, the Loxten facility will employ about 880 people.

“By consolidating its operations, the Zur Mühlen Group is focusing on a high-performing site that already stands for modern production processes and high quality standards,” the statement read.

“Bringing the two operations together will also enable TFB in Loxten, where capacity utilisation has declined significantly in recent years, to return to an economically sustainable level.”

Premium Food explained the Dissen factory would also need “significant maintenance investment” to remain open but added such a cash outlay “would not materially improve productivity”.

“Against this backdrop, consolidating production at the modern Versmold site is a logical step,” the company said, as it also cited industry challenges for the decision.

“The processed meat market has been confronting major challenges for years. Sales volumes are stagnating or declining, while prices remain under constant pressure.

“At the same time, a growing number of international suppliers with lower cost structures are entering the German market. Labour, energy, logistics and operating costs also continue to rise. Taken together, these factors are making the economic environment increasingly challenging for production sites across Germany.”

The two plants manufacture similar products, Premier Food said – the Schulte brand of sausages at Loxten and salami products at TFB.

Axel Knau, the managing director of Zur Mühlen Group, said: “In Loxten, we are bringing together not only production capacity, but above all experience and expertise.

“It is particularly important to us that our 230 colleagues remain part of this future. Together, we will create an even stronger foundation in Loxten for efficient, competitive and future-ready production.”

Given the locations of the two sites, “the change in workplace location will remain manageable for the vast majority of employees”, Premier Food said.