Dairy manufacturer Müller UK & Ireland has revealed proposals to rationalise its processing assets in England, following its acquisition of the Dairy Crest liquid milk business late last year. The move follows a similar rationalisation in Scotland earlier this year.

The company, a wholly owned subsidiary of the German Unternehmensgruppe Theo Müller, is planning to invest more than £100 million in the next 18 months across its two UK divisions, Müller Milk & Ingredients and Müller Yogurt & Desserts, to improve operational, innovation and marketing capabilities.

The proposals include £60m to upgrade processing facilities at the Müller Milk & Ingredients Severnside and Foston dairies, with further enhancements to plants at Droitwich, Manchester and Bridgwater.  The company has also reversed a decision taken by Dairy Crest before the change of ownership to close a dairy at Hanworth in south west London. However, it is proposing a phased wind down of its Chadwell Heath dairy in north east London over an 18 month period, subject to employee consultations – up to 389 jobs could be affected.

If the plant is closed, Müller says it will work with dairy farmers supplying the site to review their options to ensure they are not disadvantaged where possible.  It adds the milk distribution network in the south east will be unaffected by the proposal.

In April, Muller announced a plan to close two former Robert Wiseman dairies in Aberdeen and East Kilbride, with processing consolidated at Bellshill, near Glasgow, with investment there to increase capacity.

“When we acquired Dairy Crest’s fresh milk dairy and distribution operations just under a year ago, we made it clear that change would be required to secure a better and more vibrant future for the dairy sector in Britain,” explains Andrew McInnes, managing director of Müller Milk & Ingredients. “We have taken time to assess the best way forward and to model and design a national processing and logistics network which fully meets the needs of our customers throughout the country now and in the future.

“We are pleased to confirm proposals to invest in the capabilities of our dairies at Severnside, Foston, Droitwich, Manchester and Bridgwater having already confirmed plans to upgrade our dairy at Bellshill. By improving operational efficiencies and capabilities at these sites, we can unlock new innovation to transform the milk and ingredients sector, benefitting our consumers, customers, colleagues and farmers.

“Regrettably, it is clear that the dairy at Chadwell Heath is no longer economically viable. It requires complete overhaul and modernisation and in an industry which has struggled for many years with excess and inefficient processing capacity, we cannot justify committing the level of investment which would be required to bring this site to an acceptable and sustainable level of performance.

“Our proposal is to maintain and develop our distribution footprint in the South East of England, but to wind down processing operations at Chadwell Heath over an 18 month period. We will enter the consultation with an open mind and a determination to listen to our colleagues and rigorously assess the situation in Chadwell Heath before arriving at a decision.”