Associated British Foods (ABF) is investing “tens of millions of pounds” in upgrades at its UK baking business, chief executive George Weston told FoodManufacture.co.uk.
The group plans to improve efficiency by modernising production equipment at an initial three Allied Bakeries sites, Weston said.
It is at the “early stages” of commissioning new bread plant at its Glasgow bakery, in a bid to improve efficiency rather than boost capacity, Weston noted.
A new roll plant was also being installed at the West Bromwich bakery, again to improve efficiency rather than add capacity. And another more efficient bread line is to be installed as Allied Bakeries’ Stevenage bakery.
Weston said that the new plant in the bakeries would improve production efficiency, in a climate where bread margins were under pressure due to the continued rise in wheat costs.
He said: “We have not given a figure for how much we are spending at the bakeries, but it is several tens of millions of pounds. The new plant will lower the cost of production, and also with new plant it is easier to control the quality of the process.”
ABF would be upgrading plant across other parts of its UK bakery business going forward, he added.
He commented: “We have always invested in the supply chain, and that will continue.”
Speaking to FoodManufacture.co.uk after ABF delivered its Interim results for the 24 weeks ended March 5, Weston said that the UK grocery business had “done well” in the period. AB Agri had also seen good results. But the UK sugar beet crop had been a “black spot”, having been hit by bad weather.