Cologne-based Rewe is investing EUR80m (US$101.6m) in the construction of a new bakery for its production subsidiary Glocken Bakery.

The facility will be located in Bergkirchen, in the Dachau district. From 2009 it will supply around 1,100 Rewe and Penny stores with packaged and unpackaged baked goods.

The company said that the new facility would allow the retailer to differentiate itself through an improved own-brand offering.

"We are … laying the cornerstone to increase the uniqueness of our Rewe and Penny stores to further distinguish them from the competition. After all, breads and baked goods are amongst the calling cards of our stores," said Manfred Esser, management board member in charge of strategic purchasing for Rewe.

The group said that the move reflected its desire to increase its market share in Germany and its commitment to the German economy.

"The addition of Bergkirchen will increase our production overall by 70%. Glocken Bakery makes a significant contribution within Rewe Group to supplying our Rewe … and Penny stores with high-quality breads and baked goods and to raising the competitiveness of these outlets in this image-making product segment," Guido Siebenmorgen, MD of production plants, said at the groundbreaking ceremony.

The factory will set high environmental standards, the company added, and will consume 40% less energy due to the use of remote heat and heat recapture technology.