Partner Article

Hovis to close Birminghams and West London Factories

Hovis brand owners, Premier Foods, will close down two bakery sites and remove 130 distribution routes after falls in volume and the loss of a major contract.Factories in Greenford in West London and Birmingham are set to close in 2013 along with the previously announced closure of Hovis’ Eastleigh site.

A £75m contract with a large grocery store has reportedly been lost, and this deal is expected to end after Premier was unable to offer a sufficiently attractive offer.

The company said the move announced on Tuesday was “a further step to build value in its Bread business”, and it hopes to buttress sustainable profitable growth by streamlining Hovis’ operations.

Up to 900 jobs could be lost as a result, although a consultation period will be necessary, with 511 positions lost in Birmingham.

Distribution centres at the Greenfield and Birmingham locations will also be lost alongside further sites in Mendlesham and Plymouth.

Premier Foods’ Chief Executive, Michael Clarke, said: “It is critical that we act to assure the long-term future of the Bread Division.

“By simplifying our cost base, we can increase focus on improving efficiency, quality and service levels to help grow our core Hovis business.

“Decisions will not be taken lightly but they are necessary if we are to build a strong and successful future for the Bread Division and those who remain with our business.”

The firm expects to incur charges of around £28m as a result of these measures, which it said will be reported in its financial statements for this year and next.

This was posted in Bdaily's Members' News section by Miranda Dobson .