Statement re Chard Operations
28 May 2003 - 8:54PM
UK Regulatory
RNS Number:6054L
Dairy Crest Group PLC
28 May 2003
28 May 2003
Dairy Crest Group ("Dairy Crest")
reduces commodity ingredients exposure
Dairy Crest, the UK's leading chilled dairy foods company, today announces 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, largely for the commodity
dairy ingredients market, is likely to cease around 9th July 2003, resulting in
approximately 80 job losses. Ingredients customers will continue to be served
from the Group's existing butter and powder facility at its Severnside super
dairy in Gloucestershire. Dairy Crest will continue to invest in the
development of its alcoholic butters, creams and sauces business, with
manufacturing remaining at Chard.
The closure is expected to result in exceptional cash costs of c #4 million and
exceptional non-cash asset write downs of c #15.5 million. Net of tax, the
total exceptional cost is estimated at c #14 million. In addition, there will be
a cash realisation, estimated at c #6 million, as a result of destocking.
Drummond Hall, Chief Executive, Dairy Crest Group plc, said:
"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.
"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.
" The closure of the butter and powder facility at Chard will significantly
reduce the size of our ingredients business and is expected to have a broadly
neutral impact on the Group's profits, excluding exceptional items, for the year
ending 31st March 2004, whilst improving the overall quality of the Group's
earnings."
Preliminary results for the year ended 31st March 2003 will be announced on 10th
June 2003.
- Ends-
For further information:
Dairy Crest Group plc Tel: 01372 472200
Drummond Hall, Chief Executive
Ian Laurie, Finance Director
Sinead Noble, Corporate Communications Manager
Citigate Dewe Rogerson Tel: 020 7638 9571
Andy Cornelius, Alexandra Scrimgeour
NOTES TO EDITORS
1. Dairy Crest
Dairy Crest is the UK's premier chilled dairy foods company with leading
positions across the dairy market - dairy spreads, cheese, liquid milk, fresh
flavoured milk drinks, fresh dairy products (yogurt, fromage frais, chilled
desserts), through our Yoplait Dairy Crest joint venture.
The company focuses on building leadership positions in branded and added-value
markets and its portfolio of brands includes:
* Cathedral City, Davidstow and Wexford cheese brands which make Dairy
Crest the leading supplier of mature cheddar in the UK. The company is
also the UK's largest producer of Stilton.
* Clover is the brand leader in the dairy spreads segment and Frijj is the
brand leader in the fresh flavoured milk drinks market. Dairy Crest is
also a major producer of Country Life packet butter and Country Life
Spreadable, Willow dairy spread and the recently launched Argento, an
olive oil based spread.
* Dairy Crest acquired the St Ivel Spreads business in November 2002 with its
strong portfolio of well-known brands including Utterly Butterly, St Ivel
Gold, Vitalite and Carapelli. The acquisition has provided Dairy Crest
with a presence in every major sector of the UK spreads market.
* Dairy Crest is a leading supplier of fresh dairy products through the
Yoplait Dairy Crest joint venture with its brands Petits Filous and Frubes,
together with ranges including Wildlife and Weight Watchers.
Dairy Crest is the UK's largest purchaser of raw milk, currently processing
around 2.5 billion litres pa and is the market leader in doorstep deliveries in
southern England.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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