Ready-made expansion for food firm
ORIENTAL ready-meal supplier Ethnic Cuisine was sold yesterday in a deal with Northern Foods.
The Swansea-based company, which was founded by Meng Yap in 1994, has annual revenues of £24m. Around 350 employees will transfer to Northern Foods under the terms of the takeover agreement. The value of the transaction was not disclosed.
Established in 1994, on March 31 Ethnic Cuisine had gross assets of £13.9m.
Under the terms of the agreement, the company founder and managing director Meng Yap, pictured, will remain with the business in the short term to ensure a smooth transition.
It is the latest change in ownership at a major Welsh food supplier in recent months following the £20m management buyout at pie and pasty manufacturer Peters Food Service.
Stefan Barden, chief executive of Northern Foods, said, “This acquisition gives us further competitive strength in the ready meals market and is in line with our previously stated strategy of developing this growing market and expanding our customer base.
“Meng and his brother Steve have built Ethnic Cuisine into a profitable business, with a strong reputation for producing high quality ready meals.
“We look forward to developing the business.”
Northern Foods said the acquisition of Ethnic Cuisine will allow the company to consolidate its number one position in the ready meals market and widen its existing ready meals customer base.
It said it also supports Northern Foods’ future growth plans, in line with its recently presented strategy, by acquiring additional ready meals manufacturing capacity from existing market providers.
Northern Foods, which provides ready meals to Asda, Marks & Spencer and Morrisons, posted half-year profits of £20.1m earlier this month, after introducing a leaner business model.
The company, which now concentrates on five core areas – ready meals, sandwiches and salads, pizzas, biscuits and Christmas puddings – plans to expand into the growing ready meal market over the next 12 months.
After the acquisition, Northern Foods will hold around a fifth of the chilled ready food market, which is worth £1.5bn and is growing at approximately 6% a year.
Mr Yap, 49, said, “I am delighted to be selling this business to the market’s leading ready meals manufacturer.
“I am confident that Northern Foods will be able to grow the business and enable Ethnic Cuisine to realise its full potential.
“I would like to thank Sainsbury’s for all its support and all the loyal employees who have helped build up this successful business.
“ I wish them all success in the future.”