Don KRC, a leading Australian smallgoods manufacturer, has announced a major restructure of manufacturing operations which will result in the closure of two factories.

The company, a subsidiary of George Weston Foods, will end production at their factories in Altona (Vic) and Spearwood (WA) – resulting in all manufacturing being moved to an expanded Castlemaine site by 2010.

There will be a progressive winding down of production at both the Altona and Spearwood facilities, with the West Australian site expected to close by April 2009 and Altona by September 2010. The company indicated that 640 job losses will result, with 420 at Altona and 220 at Spearwood.

Don took over KR Castlemaine in April this year but the company reports that cost pressures “have seen Don and KR Castlemaine suffer significant and unsustainable loses; a situation which could not continue”.

Don KRC CEO Mel Sutton made the announcement to staff at Altona today, while similar meetings were held simultaneously at other sites across the country.

Mr Sutton said it was a sad day for everyone associated with Don KRC. “Today’s announcement has been upsetting for 640 of our loyal staff and I am saddened for them that this is the cost of securing our future,” he stated. “This was not an easy decision or one which was made lightly. We investigated 20 different options, before it became clear that a move to a single manufacturing site in Castlemaine was the only way to ensure the long-term viability of the business.”

Mr Sutton indicated the decision had been announced early – nine months before the closure of Spearwood and two years before the closure of Altona – to give all employees and their families time and support to manage and prepare for the future. “The Don KRC employees are our main priority,” he said. “This is sad news and we must ensure we do everything we can to support our employees and their families.

Mr Sutton advised that they consider the restructure of the business to be imperative in ensuring the Don KRC brands would prominent in the years ahead. “Between the two companies, Don KRC has been in business for some 150 years. We plan to build on this through investing in innovation and increasing our focus on the needs of consumers,” he concluded.

Don KRC’s range of brands include: Don, KR Castlemaine, Watsonia, Chapmans, Melosi, and Otto Wurth.

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