Following what it claimed was a “thorough analysis” of its cereal network, Kellogg said it would be closing its Bremen factory in order to return to "sustainable business growth" in Europe.
However, a spokeswoman for the company warned that Kellogg’s remaining European sites, in Wrexham, Manchester, and Valls in Spain, would have work towards addressing the challenges the company faces by “significantly reducing their costs”.
Kellogg is three years into its four-year ‘Project K’ cost cutting scheme designed to mitigate declining cereal sales.
The company cut 79 jobs at Wrexham in 2014, and a further 30 last November. It continues to employ around 400 people at the site.
Around 100 jobs at the Manchester factory have been lost under Project K. It also employs 400 permanent staff, plus a further 100 contracted.
‘Good news’
The Union of Shop, Distributive and Allied Workers (Usdaw) national officer David Gill said Kellogg’s ongoing commitment to its UK operations was “good news” for his organisation’s members.
He added: “Usdaw continues to work with the company to secure the future of the Wrexham and Manchester sites. We are also working at a European level to try to secure jobs across the continent.”
Kellogg said its strategic plan was to get back to sustainable business growth in Europe, and that required it to stabilise its core cereal business.
A spokeswoman said: “We have completed a thorough analysis of our cereal network. We have more manufacturing capacity than the business demands, so we unfortunately need to plan to close one of our cereal manufacturing plants. Kellogg is planning to close the Bremen plant.
“Our remaining cereal plants at Manchester, Valls and Wrexham must continue to work towards addressing the challenges we face by significantly reducing their costs, working to achieve 20% labour cost variability, and introducing more competitive employment.”
Largest volume decline
According to Kellogg, the Bremen plant was suffering the largest annual volume decline across all of its all its European sites. Employee representatives would now be consulted on its proposals and next steps.
The spokeswoman added: “We understand the challenges our employees face as a result of this planned closure and we are making every effort to support potentially impacted employees through this process.”
Earlier this month, Kellogg GB reported a 30% drop in pre-tax profit in its annual financial statement.
The cereal manufacturer’s sales fell 10% – from £150M to £135M – in the year ending January 2 2016.
Pre-tax profit dropped from £21M to £15M, mainly due to a £10M pay-out on redundancies at the Wrexham site.
Last month, Kellogg appointed the firm’s former Russia general manager Dave Lawlor as its new UK and Ireland md.
Meanwhile, read how Kellogg Manchester factory manager Tony O’Brien used company cutbacks to make his site more efficient as part of Food Manufacture’s monthly Me and My Factory series.