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Muller Milk & Ingredients Announces £60 Million Dairy Network Restructuring Plans

Published on Nov 6 2016 1:52 PM in A-Brands tagged: Milk / Müller / Restructuring

Muller Milk & Ingredients Announces £60 Million Dairy Network Restructuring Plans

Proposals designed to secure a sustainable and vibrant future for Britain’s biggest fresh milk and ingredients business have been confirmed by Müller Milk & Ingredients (MMI).

The business is proposing to invest £60m to upgrade capabilities and operational efficiencies at its processing facilities at Severnside and Foston with further enhancements to dairies at Droitwich, Manchester and Bridgwater. The project will create up to 180 new jobs.

The investment is part of a total of more than £100m which will be spent by Müller in the UK across its Müller Milk & Ingredients and Müller Yogurt & Desserts businesses in the next 18 months to improve operational, innovation and marketing capabilities.

MMI has already confirmed a major investment at its dairy at Bellshill in Scotland and reversed the decision taken by Dairy Crest prior to the sale of its dairies to Müller to close a dairy at Hanworth in south west London, securing 170 jobs at the site.

However, the business is now proposing to commence a phased wind down of the Chadwell Heath dairy in North East London over an 18 month period with the potential loss of 389 permanent posts. MMI’s distribution network in the South East is unaffected by this proposal and will be maintained and developed to meet current and future customer requirements.

MMI will begin a 45-day consultation on 10 November 2016 and will work with affected employees and their representatives to look at all options including offering alternative roles within the business.

In the event that a decision is taken to wind down processing operations at Chadwell Heath, Müller will work with dairy farmers who supply the site to review their options with the intention that wherever possible, they will not be disadvantaged.

The proposals follow the acquisition of Dairy Crest’s dairy operations, including Chadwell Heath dairy, in December 2015, and are part of MMI’s plan to put in place a modern, efficient fresh milk and ingredients processing and distribution business with national coverage, which meets the needs of its customers across the country.

Andrew McInnes, managing director of Müller Milk & Ingredients said:“When we acquired Dairy Crest’s fresh milk dairy and distribution operations just under a year ago, we made it clear that change would be required to secure a better and more vibrant future for the dairy sector in Britain. We have taken time to assess the best way forward and to model and design a national processing and logistics network which fully meets the needs of our customers throughout the country now and in the future."

He confirmed proposals to invest in the capabilities of its dairies at Severnside, Foston, Droitwich, Manchester and Bridgwater having already confirmed plans to upgrade its dairy at Bellshill.

By improving operational efficiencies and capabilities at these sites, the company can unlock new innovation to transform the milk and ingredients sector, benefitting its consumers, customers, colleagues and farmers, he explained.

“Regrettably, it is clear that the dairy at Chadwell Heath is no longer economically viable. It requires complete overhaul and modernisation and in an industry, which has struggled for many years with excess and inefficient processing capacity, we cannot justify committing the level of investment which would be required to bring this site to an acceptable and sustainable level of performance.

“Our proposal is to maintain and develop our distribution footprint in the south east of England, but to wind down processing operations at Chadwell Heath over an 18-month period."

He said the company will will enter the consultation with an open mind and rigorously assessing the situation in Chadwell Heath before arriving at a decision.

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