SAP success leads to job losses at Premier Foods

The UK's largest food producer Premier Foods said its SAP system will be a key part of a cost-saving programme which will include redundancies.

The UK's largest food producer Premier Foods said its SAP system will be a key part of a cost-saving programme which will include redundancies.

According to the firm, the programme will be carried out during the second half of 2011. Premier Foods said its head office in St Albans will be reduced in size now that an SAP platform is in operation and processes can be simplified.

"This will entail onerous lease costs for closing our Windsor offices, redundancy or relocation costs for the affected people and systems costs for changing and automating processes," the company said in its results announcement.

The programme is expected to reduce costs by £20m a year, with access costs at around £22m, of which cash costs will be around £18m.

Technology at the firm is led by CIO Mark Vickery, who joined the food manufacturer in 2005 and has overseen an IT revamp with SAP software at its heart. This was prompted by Project Fusion, the company's transformation programme aimed at simplifying business processes and generating savings from acquisitions.

Overall, Premier Foods reported an operating profit of £42m in the six months to 25 June, down from £63m a year earlier. Sales of key products such as Mr Kipling cakes dived by 4.5% to £59m over the period, while Batchelors soup fell £5m to £45m and Oxo sales decreased by 22% to £14m.

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