UK fresh prepared foods and produce firm Geest has announced that it is in discussions to form a new business, called NewCo, which would combine initially the current import activity of Geest’s English Village Salads (EVS) and the business of Thames Fruit.
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EVS is a business dedicated to supermarket firm Asda and Thames Fruit is an exclusive importer of citrus fruits and melons for Asda, which is owned by US giant Wal-Mart. The purpose in creating NewCo is to simplify the supply chain for imported produce to Asda, Geest said.
Geest would take a 76% share of NewCo and Emilio Teresa, the owner of Thames Fruit, would hold the remaining 24%. Geest would not transfer any assets to NewCo and the estimated value of assets transferring from Thames Fruit is £1m (US$1.72m).
Through a supply contract with Asda, NewCo would become its agent for imported produce. NewCo is expected to report an estimated annualised service income of some £29m and an annualised profit before tax of £1.6m in its first year of operation.
The agreement is expected to be finalised in January 2004 and NewCo to become operational in the second half of 2004. NewCo would operate from two sites in Yorkshire and Kent and EVS would continue to supply Asda separately with produce sourced from the domestic market.
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