Hilton Foods Regulatory News (HFG)

27 Nov 2009 07:00



Hilton Food Group plc

Hilton to begin supplying Denmark's leading food retailer

Hilton is pleased to announce that it has signed a long term agreement with Coop Danmark, Denmark's leading food retailer, to supply retail packaged fresh meat into all their stores across the country from 2011.

Under the terms of the agreement, after an initial roll out period Hilton will supply each of Coop Danmark's five formats, covering around 1200 stores. The stores will be supplied from a newly constructed state-of-the-art facility located adjacent to Coop Danmark's distribution centre at Aarhus, in the Jutland region of Denmark. Products supplied from the plant will include mince, sliced, added value and other pork, beef, lamb and veal products. The business is expected to create approximately 220 jobs in the Jutland region of Denmark.

Construction of the facility will commence early next year, with production and supply from the facility to Coop Danmark coming on stream in mid 2011.The building will be leased from a third party and the remaining capital expenditure will be wholly financed by Hilton, with the investment during construction and for the first two years of production expected to be approximately €22m. This investment will be financed primarily from banking facilities and also from internal cash resources.

The plant will have a capacity in the mid range of other existing Hilton facilities. Hilton will be supplying products across Coop Danmark's multi-format portfolio including the convenience, discount, supermarket and hypermarket stores. It is estimated that start-up volumes in the first year will be below full capacity but with volume growth delivered in subsequent years as the full roll out progresses.  

Information on Coop Danmark:

Coop Danmark is the country's leading food retailer with around 1200 stores, 35,000 employees and a 2008 market share around 38%. Owned by the 1.6 million members of the Danish Consumers' Cooperative Society (FDB), Coop Danmark operates a multi format portfolio of stores that range from hypermarkets under the Kvickly brand to discount stores under the Fakta Brand. It has plans in place for further openings across Denmark in future years.

Coop Danmark is also part of the Wider Coop Norden Buying Alliance, Coop Trading, which is owned by four major cooperative retail companies in Scandanavia: Danish FDB Swedish KF, Norwegian Coop NKL and Finnish Inex/SOK. 

Information on Hilton Food Group plc:

Hilton is Europe's leading specialist fresh meat retail packing company currently supplying major retailers in ten countries across Europe. Operating from five European locations, the Group is a large supplier to both Tesco and Ahold. Hilton had sales of £730m in 2008 and employs over 1500 people at its five modern European sites. 

Commenting on the agreement, Hilton CEO Robert Watson said:

"Hilton is excited by the opportunity to introduce its tried and tested business supply model into Coop Danmark and is totally confident in the positive effect that this will have for their business and ultimately the Danish consumer. Our ability to enter a new territory with a new customer demonstrates the flexibility and versatility of the Hilton business model. We continue to look at further opportunities for geographic expansion."  

Coop Danmark, Purchasing Director Jan Madsen added:

"We are please to have agreed a supply agreement with Hilton and look forward to the benefits and expertise that this will introduce into our business in Denmark. It will enable us to continue to focus on giving our customers the right choices at competitive prices."

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