16 February 2010 | Jake Kanter
Premier Foods has marked out “substantial opportunities” to cut costs through improved procurement.
The company - the UK’s largest food producer - will target raw material purchasing and supply chain operations for cutbacks. It intends to use its buying power to secure better terms from suppliers.
It also aims to save 4 per cent a year on £273 million worth of “manufacturing controllable costs” - including overheads, wastage and logistics.
In its preliminary results for last year, Premier Foods reported that input costs were “significantly higher” in 2009 than the previous 12 months. This reflected the weakness of sterling and rises in commodity prices including beans, tomato paste, meat, glass and tinplate for cans.
The company made pre-tax profits of £47 million last year, compared with a loss before tax of £405 million in 2008.