Premier Foods to shut down flour milling facility in Wales

UK-based Premier Foods has announced plans to shut down its flour milling facility at Barry Docks, Vale of Glamorgan, Wales, by the end of October this year, a move which will result in 43 job losses.

The Atlantic Mills site was established in 1904 by the Hovis-Bread Flour company, which was later renamed as Rank Hovis.

The proposed closure comes as part of a shake-up of the Rank Hovis network, which has a history of 138 years and was acquired by Premier Foods in 2007.

Premier Foods stated that it needed to take such tough decisions in order to secure a viable future for its milling business and help turn trading around at its struggling bread division.

Premier Foods Bread Division managing director and group supply chain director Bob Spooner said the company must take tough decisions to improve the longer term profitability and sustainability of the milling business by aligning its capacity to market needs.

"We recognise the impact this proposal will have for our employees in Barry and we thank them for their contribution over the years."

"However, it’s not possible to continue on the current path given excess capacity in the marketplace," Spooner added.

Premier Foods noted that it will begin consultations with the employees in Barry in the coming days.

The facility closure is part of the company’s plan to reorganise its milling business into two distinct entities in order to strengthen the focus on its free trade customer base, while vertically integrating the remaining milling operations into its baking and grocery businesses.

Premier Foods will split its milling business in two, with the company’s sites in Southampton, Manchester and Newbridge catering to supermarkets and other food manufacturers.

The remaining mills in Wellingborough, Selby, Andover and Gainsborough will be organised into a vertically integrated flour supply business which will supply the company’s baking and grocery business.

The company plans to invest £1m in improving the capability of its Southampton and Wellingborough sites as part of the re-organisation plan although the overall group guidance on capital expenditure remains unchanged.

This proposed reorganisation is the latest move by Premier Foods to re-build value in its bread and milling business.

The expected costs associated with the restructuring will remain unchanged at approximately £28m as announced in 2012.

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Image: The proposed closure of the flour milling facility in Wales comes as part of a shake-up of the Rank Hovis network, which was acquired by Premier Foods in 2007. Photo courtesy of Premier Foods.