Muller Milk & Ingredients has confirmed that it will go ahead with plans to invest £60m to upgrade its network of fresh milk and ingredients dairies in Britain.
The dairy network upgrade is expected to create nearly 160 jobs.
As part of the restructuring plans, the company will shut down operations at its dairy in Chadwell Heath, North East London.
The closure of the facility will take place over the next 15 months, resulting in loss of 389 permanent posts.
The decision has been made following a review of its dairy network designed to secure its future sustainability, competitiveness and enhance Müller’s capabilities to produce an improved range of fresh milk products.
Müller Milk & Ingredients managing director Andrew McInnes said: “We understand that the decision to wind down processing operations at Chadwell Heath directly affects a number of our colleagues, but unfortunately this announcement is unavoidable.
“It is clear that the dairy at Chadwell Heath is no longer economically viable and in an environment where there is simply too much fresh milk processing capacity, we simply cannot justify the level of investment required for the complete overhaul and modernisation required at the site.”
The company held consultations with employees, unions and other representatives regarding the restructuring of operations.
However, Muller will invest in processing facilities in Severnside, Foston, Droitwich, Manchester and Bridgwater.
The upgrade project includes a new filling line at Foston, enhancements to processing capabilities at Droitwich and Bridgwater, and the creation of a centre of excellence for flavoured milk and fresh cream at Severnside.
McInnes said: “Our goal is to secure a sustainable and vibrant future for the dairy sector in Britain and this decision enables us to press on with our investment plans.
“By improving operational efficiencies and capabilities at various sites, we aim to transform the milk and ingredients sector, benefitting our customers, consumers, colleagues and farmers.”
Müller revealed that it has reversed a decision taken by its Dairy Crest to close a dairy at Hanworth in South West London, securing 170 jobs.
Dairy Crest took the closure decision before it sold its dairies to Muller.
In April last year, the dairy firm announced an investment of £15m in Scottish milk dairy at Bellshill over the next three years.
