Dairy Crest confirms plans for closure of Shropshire creamery
CHILLED foods group Dairy Crest has confirmed its plans to close one of its operations in Shropshire putting around 160 jobs at risk.
In a trading update today the company said its site at Crudgington would close in 2014 as part of a drive to improve efficiency.
The consolidation of operations will see the firm’s spreads production operation moved to Kirkby on Merseyside in a move which could create new around 50 new jobs.
Consultations with staff at the Shropshire plant have begun but unions representing workers said employees were shocked by the announcement.
In a pre-close trading update for the six months ending September 30, 2012 – ahead of its interim results on November 8 – it said: “As part of our continued drive to grow and improve efficiency across our business, we have decided to consult with employees on plans to consolidate our spreads production into a single UK location, our existing facility at Kirkby, Merseyside. As a result of the consolidation our site in Crudgington, Shropshire, will potentially close in 2014.”
The company said trading in the first half of the year had remained challenging and profits, adjusted for the disposal of its French spreads business, St Hubert, were expected to be lower than the same period last year.
However, it said profit expectations for the full year ending March 2013 remained unchanged.
It said its four key UK brands – Cathedral City, Country Life, Clover and Frijj – had performed strongly in the first half, backed by increased marketing expenditure.
Its Dairies business is said to be facing unprecedented market conditions but it remains focused on achieving a 3% return on sales in the medium term.
“We continue to take a number of decisive actions to achieve this, including implementing milk selling price increases, closing our Aintree creamery, consolidating milk rounds to allow the closure of 23 depots in the six months and reducing overheads. Plans are on track to close our Fenstanton dairy, as previously announced, this autumn,” it said.
The group increased the price it pays its non-aligned supplier farmers for milk by 1.85p per litre from October 1, 2011, but a steep fall in cream prices led to a price reduction of 2p per litre from May 1, 2012.
However, after farming protests, a second planned reduction, due to take place on August 1 was postponed while it negotiated price increases with its customers. The group said this was likely to have an adverse effect on profits in the period.
