By Daniel Hunter
Shropshire-based egg producer Oaklands Farm Eggs has completed the refinancing of its existing debt and working capital facilities, moving all of its facilities to HSBC Commercial Bank.
The new arrangement provides the company with up to £28 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.
Oaklands Farm Eggs is the UK’s leading colony egg producer and processes approximately 500 million fresh, free range and organic eggs a year for a comprehensive range of retail, wholesale and food service customers, including Iceland, Aldi, Farm Foods, Bookers, Whitbread, Costco, Blakemore, Dairy Crest, Compass and 3663, which is supplying the eggs for the 2012 Olympics. The company turned over £40 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.
Headquartered in Telford, Oaklands Farm Eggs is a family business owned and managed by brothers Elwyn and Gareth Griffiths. The farm was founded by their parents Aled and Olwen in 1961, and Oaklands Farm, where the main production facility is based today, was purchased in 1969, with large-scale egg production beginning in 1971. Today, the company employs 200 staff across 10 UK sites, including Swindon, Shawbury, Alderley and the Harper Adams Agricultural College.
“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," Elywn Griffiths, Oaklands Farm Eggs Finance Director, said.
"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.
“We are totally focused on the welfare of our hens and the safety of our products. We believe the facilities we have installed, and will continue to install as we expand, make us a leader in care for bird welfare in the UK and in high volume food production. We have won numerous awards for the innovations we have introduced to egg production and the welfare of our hens and we aim to receive similar recognition going forward.”
Ian Stitt, HSBC’s Midlands Deputy Head of Corporate, commented: “Our partnership with Oaklands Farm Eggs will help prepare this impressive business for the next 25 years and consolidate its position as one of Europe’s leading egg producers. The facilities have been structured to support the company as it expands and will give it the flexibility it requires as it develops.”
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