March 23, 2012
Britain's Oaklands Farm Eggs has moved its facilities to HSBC Commercial Bank and refinanced its existing debt and working capital facilities.
The new arrangement provides the company with up to GBP28 million (US$44.5 million) in a combination of term debt, asset finance and working capital.
The new relationship, led by John Barker, HSBC Global Relationship Manager within the HSBC Midlands Corporate team, will see HSBC support Oaklands Farm Eggs' investment programme to increase production capacity and upgrade facilities to further improve the welfare of its hens.
The company turned over GBP40 million (US$63.5 million) last year and the new investment will give it the capacity to process nearly one billion eggs a year through the development of new barns and packing stations.
The company has invested extensively to ensure its production facilities exceed new EU requirements, introduced on 1 January 2012, to protect the welfare of hens. Owners Elwyn and Gareth Griffiths developed their own 'enriched' cage system with Italian manufacturer Techno to achieve higher welfare standards than those demanded by the EU, and the system has since been installed by a number of global egg producers.
The new EU regulations has led to a surge in demand for UK eggs as producers in the majority of EU member states have failed to meet the implementation date of 1 January 2012 and cannot sell their product within the European Union. It is estimated that the new rules have led to a 30% shortage in egg production.
Elywn Griffiths, Oaklands Farm Eggs Finance Director, said: "We produce high welfare, European Compliant eggs and we are seeing unprecedented demand for our product from the UK and Europe as a result of the EU legislation and the UK's ever growing love of eggs. We are investing significantly in the business to position ourselves for the future, not just for today, and it is important to have a banking partner that understands our business and industry. HSBC's team appreciates the dynamics of the marketplace, the importance of building a long-term, sustainable relationship and the flexibility and scale of modern food production."