Dairy Crest to reduce commodity ingredients production

- Last updated on GMT

Related tags: Dairy crest, Milk

Dairy Crest, the UK's leading chilled dairy foods company, has
announced plans to significantly reduce its commodity dairy
ingredients business with the closure of part of its operations at
Chard, Somerset.

Dairy Crest, the UK's leading chilled dairy foods company, has announced plans to significantly reduce its commodity dairy ingredients business with the closure of part of its operations at Chard, Somerset. Production of skimmed milk products and bulk butter is likely to cease around 9 July 2003, which will result in approximately 80 job losses.

However ingredients customers will continue to be served from the group's existing butter and powder facility at its Severnside super dairy in Gloucestershire. In addition, Dairy Crest will continue to invest in the development of its alcoholic butters, creams and sauces business, with manufacturing remaining at Chard.

"The closure of butter and powder operations at Chard is in line with our strategy to increase our focus on developing our added value and branded businesses and will significantly reduce our exposure to the commodity ingredients market,"​ said Dairy Crest Group chief executive Drummond Hall.

"While we regret these job losses, during the last year significant new butter and powder capacity has come on stream, which has made it increasingly difficult to source the required level of milk at a commercially realistic price.

"However, by retaining the facility at Severnside, we will continue to have the ability to balance our milk supply efficiently and to supply premium products to our major ingredients customers. We will also continue to invest in developing our added value alcoholic butters, creams and sauces business."

Dairy Crest believes that the closure of the butter and powder facility at Chard will have a broadly neutral impact on the group's profits, excluding exceptional items, for the year ending 31st March 2004. Preliminary results for the year ended 31st March 2003 will be announced on 10th June 2003.

Dairy Crest is one the UK's leading chilled dairy foods company, manufacturing dairy spreads, cheese, liquid milk, fresh flavoured milk drinks and other fresh dairy products. It is also the UK's largest purchaser of raw milk, currently processing around 2.5 billion litres a year and is the market leader in doorstep deliveries in southern England.

Related topics: Commodities, Pricing Pressures

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