Hilton Food poised for more growth after Danish deal

Hilton Food's multi-million pound investment in a new meat plant to supply a major Danish supermarket could trigger an expansion push throughout Scandinavia, said analysts.

The forecast came as the UK-based meat packers unveiled plans to spend GBP22 million on a new processing plant after signing a long-term deal to supply packaged meat to retailer Coop Danmark. The company is the country's leading retailer with a market share of 38 percent.

Numis Securities Ltd analyst Nicholas Ceron expects sales from the venture to reach around GBP90 million by the end of 2012, adding that the move also increased the possibility of further geographical expansion since the Danish outfit is part of a wider group with stores throughout Scandinavia.

Under the terms of the deal announced last week, Hilton said it will provide meat for about 1,200 Coop Danmark's stores from a newly constructed state-of-the-art facility to be located next to retail firm'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 company said the plant would have a capacity in the mid range of other existing Hilton facilities. Estimated start-up volumes in the first year will be below full capacity, but this would increase in subsequent years as full roll-out was achieved.