Revealing the decision alongside its annual results, issued on 1 October, the company said it would close its Southampton flour mill, sell its Selby and Manchester mills to Whitworth Bros and integrate its Wellingborough mill into its supply chain. The Wellingborough site would ensure it had direct access to high quality flour for its branded products, it said.
Unite the union expressed ‘serious concern and dismay’, warning the closure of the Southampton operation would not just lead to the loss of up to 70 jobs there. It would also wind up warehouse and logistics operations dedicated to Hovis at DHL Bawtry, near Doncaster, DHL Southampton and DSV Belfast by the end of this year, it claimed. However, this has not been confirmed by Hovis.
Unite acting regional secretary for the south east Ian Woodland said: “This is a serious blow to the workers and their families and, more generally, for the Southampton economy. The mill has been operating for more than 80 years, so there is a lot of history here.
“We are asking for an urgent meeting with the Hovis management to explore the business rationale for the proposed closure and to make the case strongly for a rethink on this decision.
“One of the points we will be making strongly is that the Southampton site has never had any investment and refurbishment compared with the other Hovis sites across the UK which have been redeveloped – this is a very disappointing aspect of today’s announcement. We will be also giving maximum support to our members in the challenging days and weeks ahead.”
The decision follows Hovis’ sale of the Holgran and Fleming Howden business units to AB Mauri in May 2018.
The company said during 2018 it had invested in new manufacturing capability and product development, building on the launch of its Lower-Carb, Half Loaf and seeded breads.
Announcing annual results for the year to 31 December 2017, the company stated it had suffered a loss after tax for the year of £11.7m. However, this represented an improvement of £22.5m, versus the previous year’s loss of £34.2m. Total sales rose by 5.9% year-on-year to £326.9m.
Figures listed at Companies House showed Hovis clocked up pre-tax profit of £349,000, a considerable turnaround from 2016’s £30m loss.
It stated that it had restructured its engineering and site management structures, closed a logistics facility and transferred activities to a neighbouring site and closed one of its bakeries.
“We have achieved a considerable amount over the last three years and delivered positive transformation of the group and our future journey continues to be exciting,” said chief executive officer Nish Kankiwala. “We are committed to our strategy of becoming the best quality brand in baking and will focus our investment on our core baking business.
“As a result, we have taken the decision to exit three milling sites, and to integrate Wellingborough Mill into the Hovis Baking Supply Chain, ensuring the continued delivery of high quality flour to the Hovis brand.
“There is no doubt the bread market will remain extremely challenging. However, we are confident our strategy to become a focused, fully-integrated manufacturer of bakery products will allow us to further strengthen our successful business. Hovis is an iconic brand that has built a strong market position over 132 years in business and which continues to grow in popularity through innovating and investing in its future.”