More than 300 jobs have been put at risk following the announcement of plans to close a Staffordshire food plant.
Premier Foods revealed yesterday, Thursday, that it intends to close its site in Knighton due to it becoming unprofitable.
The company, which also yesterday reported a 12 per cent rise in sales over its third quarter to the end of December, expects the closure could cost about £10 million but will improve profits in the long run.
Consultations with staff are set to begin. The site, near Eccleshall and north west of Stafford, predominantly makes non-branded powdered drinks. It is expected to undergo a phased closure, shutting in 2024.
Yesterday’s trading update says the plant is “not aligned to the Group’s branded growth model strategy and is marginally unprofitable at Trading profit”.
A statement reads: “It is recognised that this will be an unsettling time for those circa 300 colleagues who are potentially affected by these proposals and they will be fully supported and consulted with throughout the process.”
Staffordshire County Council’s deputy leader and cabinet member for economy and skills Philip White said: “This is devastating news for all concerned and with so many jobs at risk a real blow to local communities.
“The county council will work with partners including the borough council and DWP to ensure those affected have the support they need at this difficult time.
“The partnership will contact the company to discuss next steps and set out the free support services available to those employees affected.
“These include our recently launched Staffordshire Jobs and Careers brokerage service, where our team of expert brokers will be on hand to match people with training and employment opportunities locally, of which there are many across the county.”
Premier Foods is one of the UK’s largest food businesses and home to brands including Ambrosia, Oxo stock cubes and Homepride cooking sauces. It employs 4,000 people across the country.
The company also operates a bakery in Stoke-on-Trent, which manufactures Mr Kipling cakes, and has a warehouse in Tamworth.
As well as a 12 per cent increase in sales, grocery sales hiked 17.4 per cent over the quarter and branded sales were up 15.5 per cent.
With food costs on the rise, the group said it was offsetting soaring costs with annual price rises and cost savings.
Chief Executive Alex Whitehouse described figures for the last quarter as “strong” but said: “Input cost inflation remains at elevated levels, and we continue to take action to offset this inflation through a range of measures.
“With strong trading momentum as we enter our final quarter of the year, and with more brand investment and new product launches to come, we are well on track to deliver on expectations for the full year.”