The five-year agreement will involve building a state-of-the-art factory in Poland for the production of fresh lines such as sandwiches, pizza, ready meals and soups.
This construction will be funded by an investment of €6 million in plant and equipment. The factory construction will be paid for through a sale and leaseback plan.
It is expected that production at the new site will begin in the first quarter of 2019.
Fresh products for Poland
The two businesses have also agreed to sign a further five-year long-term supply agreement for Hilton to continue supplying Tesco’s Central European stores with pre-packed meat.
Hilton chief executive Robert Watson OBE said: “We have a long and successful history of working with Tesco, one of the world’s biggest retailers. This agreement represents an opportunity to enter a growing food segment of the market. We look forward to seeing the positive effect our tried-and-tested business model will have on this relationship, which will be supported by our flexible and versatile approach to meeting local requirements. We continue to look for further opportunities for geographic expansion.”
Matt Simister, Tesco Central Europe CEO, said: “I’m delighted that we are extending our deep group-wide partnership with Hilton to bring new manufacturing investment and capability to Poland. Our collective experience and expertise will bring new, innovative and high-quality fresh and convenient products to our customers in Central Europe.”
Who’s who in the deal?
Hilton Foods is a specialist fresh meat retail packing company supplying major retailers including Tesco, Ahold, ICA, Coop Danmark and Sonae in Europe and Woolworths in Australia. In 2016 it had sales of £1.2 billion and employs around 3,000 people worldwide.
Tesco has over 6,800 stores around the world, with sites in the UK and Ireland, Central Europe, and Asia, as well as online. It employs more than 460,000 people worldwide.