UK-based Premier Foods has announced its plans to close two bakery sites and streamline its distribution network, as a part of its effort to revamp its struggling Hovis bread business. This move will lead to a loss of 900 jobs.
This announcement comes after the company conducted a review of its operations following the loss of a £75m-a-year contract with Co-operative supermarkets in October.
Under the proposed plan, the company will close a bakery site and distribution center in Birmingham next year, resulting in the loss of 511 jobs. It will close its bakery site in Greenford next year, with the loss of 196 jobs.
In addition, the company will close the distribution operations in Greenford, Birmingham, Mendlesham and Plymouth, with the loss of 95 jobs.
Premier Foods chief executive officer Michael Clarke said that while the company generated solid growth momentum in its grocery division, it is critical to act to assure the long-term future of the bread division.
"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," Clarke added.
Premier Foods has been struggling to pay off its debt of £1bn, which was built up through acquisitions of several brands including Homepride and Fray Bentos.
In March 2012, it renegotiated its bank debt, and received an extension of its repayment deadline from 2013 to 2016.
