GNC Greencore Group Plc

RNS Number:3024H
Greencore Group PLC
12 January 2005


GREENCORE GROUP PLC


Greencore to Consolidate Sugar Manufacturing at One Site

Greencore Group plc ("Greencore") announces that it is to consolidate all of its
sugar manufacturing at its Mallow site and will close its Carlow manufacturing
facility in mid-March 2005.  In addition, following recent union agreement, a
redundancy programme will be implemented at the Mallow facility and all other
activities of the business will be streamlined.  This decision has been taken
following a strategic review of Irish Sugar in anticipation of pending reform of
the EU sugar regime and the increasingly competitive nature of its markets.

In total, 189 full-time and 137 seasonal employees will become redundant, with
Irish Sugar's total workforce reducing from 614 to 288.  Consultations will
commence immediately with all employees impacted by the closure.

Work will now begin on upgrading and increasing the capacity of the Mallow plant
and will be completed in time for the 2005 processing campaign.  The campaign
will also be extended into January of next year; this extension will be scaled
back over the following years in line with the anticipated quota reductions
arising from the EU sugar regime reform.

The net cash outlay arising from this consolidation is anticipated to be between
Euro20 million and Euro25 million, principally comprising the capital investment at
Mallow, redundancy costs and site decommissioning costs, less anticipated
proceeds from surplus asset disposals.  The consolidation will also result in
the annual average capital expenditure requirement of Irish Sugar reducing by
some Euro4 million for the foreseeable future.

The consolidation will reduce Irish Sugar's annual cost base by some Euro6 million
to Euro7 million by the 2007 campaign, before taking account of the costs of
financing the consolidation.  This will, however, only partially offset the
anticipated profit reduction that will arise from the EU sugar regime reform.

The redundancies and asset write-offs will give rise to an exceptional loss,
whilst an exceptional profit is anticipated from the asset disposals.  The
exceptional loss, to be provided for in the 2005 accounts, is expected to amount
to some Euro65 million, of which approximately Euro26 million is anticipated to be a
cash cost.  The amount and timing of the exceptional profit will depend on the
asset disposal process.

Commenting on the consolidation, Greencore Chief Executive David Dilger said:

"There is a long and proud tradition of sugar production in Carlow.  This
decision, therefore, has been particularly difficult and painful but,
nonetheless, unavoidable.

"European sugar processors are facing increased levels of competition and
impending regime reform.  We have conducted a comprehensive review of all
options available to the business in this challenging environment.  It has
confirmed that consolidating manufacturing in Mallow is a necessary step to
secure the survival of the Irish beet growing and sugar processing industries
for the benefit of all involved.

"It is also clear from our review that we must act immediately.  Since the
initial reform proposals were published last year, the viability of sugar
production in Ireland has been questioned, which, in turn, has encouraged larger
European competitors to target our customers.  This consolidation illustrates
our determination to be a competitively priced producer of sugar.  Furthermore,
whilst the initial reform proposals are likely to be modified, inevitable
reductions in quota make the move to one manufacturing facility unavoidable."


                                                               12 January, 2005.



CONTACT: PATRICK KENNEDY                             TELEPHONE  +353 1 605 1003
                                                     FAX        +353 1 605 1103



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