Fox’s Biscuits sees double consolidation
The project is expected to enable increased capacity, while raising the efficiency of operations at each of its Batley, Kirkham and Uttoxeter sites initially. It will result in the loss of around 220 jobs and is expected to be completed in the first quarter of Northern’s 2011/12 financial year.
Adding capacity will help Fox’s to fix current ‘pinch-points’, with all technology being portable for use at other sites in the future, said the company. Either the Uttoxeter or Batley plant is considered the most likely target for closure.
The project is expected to generate a return on investment in excess of 20%. Key investments over the next 18 months include a new ‘creams line’ at Kirkham, new automation for its ‘melts line’ at Batley and a new wrapping system at Uttoxeter. This transitional work forms part of a strategy to focus manufacturing around a smaller number of larger, highly automated sites in the future.
Announcing its half-year results for the 26 weeks to September 26 last week, Northern reported like-for-like sales growth of 2.9%, which it attributed to a buoyant chilled and bakery sector. However, total sales fell to £466.9M from £468.6M, reflecting closure of its Fenland Foods ready meals plant in Grantham last year.
The Fenland plant, which made Italian-cuisine ready meals, was mothballed because of a failure to agree a price increase with its main customer Marks & Spencer.
In May this year Northern also announced plans to close its Hull factory after it lost a contract to supply chilled ready meals to Morrisons, at the cost of 349 jobs.
The company has embarked on a feasibility study to raise factory efficiency across the group, including work at its Fenland site.
Commenting on the results, Northern’s chief executive Stefan Barden said: “Our business is stable, balanced, and benefiting from management actions taken to improve our performance. We have many opportunities to drive shareholder value over the coming years and today we are announcing a significant investment in Fox’s Biscuits, which will enhance its profitability and provide a competitive advantage.”
He added: “Market conditions remain competitive but at this stage of the year, our sales and profit expectations for the current financial year remain unchanged, and in line with market expectations.”
