Culina merges to offer wider supply chain services

The merged company, which will be known as Culina Logistics Ltd., will be part-owned by Luxembourg-based TML Invest - the investment arm of Theo Müller, owner of UK-based Müller Dairy Group.

"Our aim is to be the UK's leading food and drink logistics specialist," stated Thomas van Mourik, Culina's chief executive officer.

Culina will now have the ability to provide a range of ambient and multi temperature supply chain services, a national warehousing and transport network and an increased range of quality systems and services.

Culina will now have an annual turnover of £125m (€174m), a staff of 1,300, a total of 1.45 million square feet (135,000 sq m) of space at nine sites, and a fleet of 250 vehicles and 550 trailers.

Group operations director Rien Brakel said the new business will be able to access a wider range of services through the merger.

"Chilled customers will see potential economies of scale in our ability to offer a combined solution incorporating their ambient ranges," he stated.

"Ambient customers will have a ready-made solution as their sector moves towards chilled disciplines, including daily ordering, as well as stockless redistribution centres with 24 by 7 customer services and SOP (standard operating procedure) teams."

Culina claims the integration of its systems with Baylis' will help customers to speed up administration, optimise inventory and cut associated costs.

The increased network capability will increase the range of storage and delivery options available.

"A range of value added services, including product customisation, will help to meet the increasing demand from retailers for shelf-ready products and the growing use of promotional activity by manufacturers to drive sales volumes," the company claimed.

Negotiations with several multi-temperature food and drink manufacturers are underway to determine the most efficient logistics services for their product ranges, Culina stated.

The manufacturers were not named a statement announcing the merger.

"We have the capacity, flexibility, resources and financial clout to deliver unbeatable supply chain solutions to the food and drink industry," stated CEO Thomas van Mourik.

"That's what we intend to do."

Culina's distribution centres include those at Market Drayton, Milton Keynes and Prime Point.

Baylis Logistics currently employs almost 650 people at five warehousing and distribution centres, with about a million sq ft (93,000 sq m) of space.

Baylis' customers include Ferrero, Discovery Foods and General Mills UK.

The company has a turnover of £41m in 2005.

The merger is part of a consolidation trend among Europe's third party logistic (3PL) providers, as they move to expand their operations, technological capabilities, and services.

Food processors and other industries contract 3PL providers to broker transportation and other supply chain management services.

It is a form of outsourcing supply chain management so that the processor can concentrate on in-plant operations and even reduce costs.

More and more EU -based companies are outsourcing their logistics requirements to 3PL providers, according to an European Commission study last year.

Competition in the European logistics sector is intense, due to the low concentration rate of third-party logistics in Europe, the Commission stated.

The top 20 companies have a market share of 33 per cent, a relatively low share.

Logistics covers the planning, organisation, management, control and execution of freight transport operations in the supply chain.

On average, logistics costs account for 10 per cent to 15 per cent of the final cost of a finished product.

The European Commission estimate includes costs such as transportation and warehousing.