Tomkins closes another bakery

TOMKINS, the industrial conglomerate, yesterday announced the closure of another bakery as part of its continued rationalisation of Ranks Hovis McDougall, writes Russell Hotten.

The bakery, which employed 65 people in Dundee, is the fourth to close and brings the number of job losses at RHM's British Bakeries division to 1,000. The move is to help reduce over-capacity in the bread-making industry and cut operating costs at RHM, which Tomkins bought for pounds 935m last December.

Bread from British Bakeries accounts for about one-third of the UK market, and Tomkins has cut capacity by about 9 per cent since buying RHM. Bakeries at Croydon, Exeter and Hackbridge, London, have closed and capacity has been cut at other sites. Tomkins estimated it had cut out about 3 per cent of the UK's total bread-making capacity, in a market that is said to be about 15 per cent over-supplied.

Anthony Spiro, Tomkins' spokesman, said the overall rationalisation plan at RHM was going 'very well', but he would not say whether more redundancies were planned or how far the cost-cutting programme had gone.

Since the takeover, RHM has shed 2,000 jobs across the group's businesses, including Mr Kipling cakes and cooking ingredients such as Paxo and Bisto. But analysts said there were still big cost savings to be made. Tomkins has set aside provisions of pounds 90m to restructure RHM.