The business will start a 45-day statutory collective consultation process to assess current and future utilization and capacity requirements at its six dairies. Whilst the outcome will not be determined until this work is completed, the company said it cannot rule out the closure of a manufacturing site should this be required in order to bring capacity into line with current and future customer requirements.
MMI has also confirmed that it intends to operate in a business partnership with Culina Group, the chilled distribution and transport company owned by Unternehmensgruppe Theo Müller, to further optimize its cost base.
Culina Group will assume day-to-day management control of MMI Distribution from June 1, 2019. All 2,500 employees working in this area will remain part of Müller UK & Ireland LLP and will see no change to their terms and conditions of employment.
Ian Smith, of Culina Group, will be responsible for MMI Distribution and all of the current MMI logistics leadership team will work with him.
MMI Distribution will assume control from the point that vehicles have been loaded for delivery at MMI’s dairies to the point that products are delivered directly to customers or to MMI’s depots. Tanker operations bringing milk from farms to MMI’s dairies will continue to be managed by MMI.
Patrick Müller, chief executive officer of Müller Milk & Ingredients said, “Project Darwin is making excellent progress with the whole workforce fully engaged in securing a vibrant, progressive future for our fresh milk business and very positive collaboration with customers who share our desire to reinvigorate this important sector.
“It is a matter of considerable regret that we must consult on steps which could result in a restructuring of our dairy network and capacity but we must ensure the sustainability of our business and address potential over-capacity in our network.”
Launched in February, Project Darwin is designed to reduce cost and improve margins against a backdrop of declining consumption of fresh milk and changes in retailing.
The transformation program includes a comprehensive review of every aspect of MMI’s operations, logistics, back office and people organization to simplify the business, reduce costs and increase customer focus and accountability.