Dairy Crest processing plant to close under restructuring plans
Production at the milk processing plant ceased yesterday (8 January 2013). Production staff at the Cambridgeshire plant are expected to complete their activities by 11 January 2013, and clean down staff are scheduled to finish their work by 25 January 2013.
All 248 employees at the plant have been made redundant. Dairy Crest has claimed, however, that more than 80% have found alternative employment, education or retired.
The closure is in line with Dairy Crest’s current efforts to restructure its dairies business. Throughout 2012 and into 2013, Dairy Crest has taken a series of actions designed to reduce its outstanding debts and improve the efficiency of its overall business.
According to Dairy Crest, closing the Fenstanton plant is the “right decision for the long-term future” of the company.
Extremely difficult decision
“In April we took the extremely difficult decision to enter into consultation with the 248 employees at our dairy in Fenstanton, Cambridgeshire, with the view to closing down production at the site,” said a statement from Dairy Crest.
“This decision was not taken lightly, but we believe that the restructuring of our dairies business is the right decision for the long-term future of Dairy Crest and will allow us to reinvest in our other sites.”
“We will be closing down the milk processing activities at Fenstanton during January. We kept 73 people on during the busy Christmas period to ensure that Dairy Crest continued to deliver our top quality produce to the standards expected by our customers,” the statement added.
Improve efficiency, reduce debt
The closure is the latest in a long line of actions taken by Dairy Crest to improve its efficiency.
In July 2013, Dairy Crest sold its French spreads business, St Hubert, to Paris-based Montagu Private Equity for €430m. The proceeds of the sale were used to significantly reduce the firm’s outstanding debts.
It also announced the closure of its Crudgington, Shropshire plant, and the consolidation of its Spreads business into one site at Kirkby, Merseyside.
In December 2012, stock brokerage Panmure Gordon praised Dairy Crest’s restructuring efforts, forecasting that the combined action should help the business return to 3% operating margins by fiscal year (FY) 2013.
