UK-owned dairy foods company Dairy Crest Group plc (DCG.L) said it has retained its contract to supply liquid milk to Sainsbury’s from February 2014, after a competitive process. The new contract is for 3 years until 2017. Though the contract conditions would change from 2014, the company’s ongoing cost reductions are anticipated to offset any financial impact on its business.
Further, Dairy Crest said it would continue focussing on driving efficiencies so that it can match customers’ demands for cost, quality and service. Earlier, the company said it was on track to exceed its annual cost savings target by delivering savings of about 23 million pounds for the year ending March 31, 2013 and that it had already identified several meaningful projects for the following year.
Mark Allen, Chief Executive of Dairy Crest, commented, “Our track record of making efficiencies allows us to supply our customers with competitively priced milk, pay our farmers a fair price and move towards our medium-term target of 3% return on sales in our Dairies business.”
In a separate press release, Dairy Crest announced a reorganisation, including board and other senior management changes. The sale of its Yoplait Dairy Crest’s shareholding in 2009, the creation of a unified Dairies business and the sale of its French Spreads unit, St Hubert, last year have provided the opportunity to simplify the business further. Therefore, beginning April 1, 2013, the start of its fiscal year, Dairy Crest would consolidate its organisation into a single structure focused on consumer driven growth with an integrated supply chain. Following the reorganisation, the company would continue to report its results for Cheese, Spreads and Dairies separately.
Additionally, Alastair Murray, after around 10 years as finance director, is leaving the company to pursue other business interests, and would be replaced by Tom Atherton who has been Dairy Crest’s Director of Financial Control for the past four years and has worked for Dairy Crest for seven years. Prior to that, Tom held senior finance positions in Logica plc and Thorn plc.
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by RTT Staff Writer
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