Müller Milk & Ingredients has confirmed that it will proceed with plans to invest £60m to upgrade its network of fresh milk and ingredients dairies in Britain, creating up to 180 jobs.
However, the company has announced that operations at its dairy in Chadwell Heath, North East London will be wound down over the next 15 months with the potential loss of 389 permanent posts.
The decision follows a review of the company’s dairy network designed to secure its future sustainability, competitiveness and enhance Müller’s capabilities to produce a greater range of fresh milk products.
The consultation has included discussions with employees, unions and other representatives and the company has committed to providing support for all of those affected over the wind down period.
Müller will in addition, work with dairy farmers who supply the site to review their options with the intention that wherever possible, they will not be disadvantaged.
The £60m network investment at processing facilities in Severnside, Foston, Droitwich, Manchester and Bridgwater is designed to secure a 'sustainable and vibrant' future for Britain’s biggest fresh milk and ingredients business.
Key areas of investment include a new filling line at Foston, enhancements to processing capabilities at Droitwich and Bridgwater, and the creation of a centre of excellence for flavoured milk and fresh cream at Severnside.
Müller has already announced a £15m investment in its dairy at Bellshill to create a Scottish fresh milk and ingredients centre of excellence and reversed a decision taken by Dairy Crest, prior to the sale of its dairies to Müller, to close a dairy at Hanworth in South West London, which secured a further 170 jobs.
Andrew McInnes, Managing Director of Müller Milk & Ingredients said: “We understand that the decision to wind down processing operations at Chadwell Heath directly affects a number of our colleagues, but unfortunately this announcement is unavoidable.
“It is clear that the dairy at Chadwell Heath is no longer economically viable and in an environment where there is simply too much fresh milk processing capacity, we simply cannot justify the level of investment required for the complete overhaul and modernisation required at the site.
“Wherever possible, we will offer colleagues opportunities to relocate within our network, and we will do everything we possibly can to support those who do not wish to relocate or for whom there are no roles.”
Mr McInnes concluded: “Our goal is to secure a sustainable and vibrant future for the dairy sector in Britain and this decision enables us to press on with our investment plans. By improving operational efficiencies and capabilities at various sites, we aim to transform the milk and ingredients sector, benefitting our customers, consumers, colleagues and farmers.”