UK – Müller Milk & Ingredients (MMI) plans to shut down production at its Foston dairy facility in Derbyshire, UK with the potential loss of 223 permanent posts.
The company said it expects to stop operations at the facility by the end of the year, and processing will be transferred to its other dairy plants.
The Foston closure is part of MMI’s 45-day statutory review of its dairy network aimed at capacity and business improvements against a backdrop of declining consumption of fresh milk and significant changes in retailing.
The facility was identified to be most at risk due to its size and inability to absorb significant production volume from other dairies, its current level of utilisation and its geographical position relative to customers.
Muller has committed to provide support to for all of those affected over the wind down period including employees and farmers.
Most dairy farmers who supply Foston will be unaffected with milk switched to be processed at other dairies.
“We fully recognise that this decision will be devastating for our employees at Foston, but if we are to have any prospect of building a fresh milk business which is sustainable in the short and longer term, we need to make significant changes to reduce our costs,” said Patrick Müller, Chief Executive at Müller Milk & Ingredients.
“It is important to stress that the workforce at Foston has handled this review period with the utmost professionalism and diligence.
“That this site must now cease production is no reflection on the capabilities and dedication of our employees.”
The dairy network review was part of MMI’s Project Darwin programme which aims to secure a vibrant and sustainable future for the business through cost reduction and margin improvement.
Through the programme, Muller targets to save £100 million (US$129 million) from across its entire dairy chain.
The strategy includes a strategic review of the company operations, logistics, back office and people organisation to reduce costs and increase customer focus and accountability.
“MMI has the best invested network in our industry. But we must adapt quickly to meet the realities of a changing market,” said Patrick Muller.
“Inaction is not an option and would place at risk the future viability of fresh milk, long regarded as a staple of the nation’s fridges.”