Investment sees Asda division take on new staff

IPL, an importing business which was bought by Asda two years ago, is on the look-out for 100 new employees after spending almost £3m on new salad packing and plum packing machinery at its headquarters on Normanton Industrial Estate in West Yorkshire.

The factory, which specialises in fruit and vegetables, is one of 10 IPL centres across the UK which imports goods from around the world to sell in Asda stores.

IPL was formed seven years ago as a dedicated supply partner for Asda’s produce business, importing fruit.

It is now one of the largest importers of produce in the UK, employing 1,000 people in the UK, including 450 in Yorkshire. It has recruited 150 people in Normanton in the last three months.

Asda’s drive to buy produce directly from farmers and manufacturers, in tandem with US parent Wal-Mart, began two years ago when it bought IPL.

Since then IPL, which has offices around the world, has quadrupled in size and now provides around £1bn of worth of goods for the supermarket chain, up from around £260m.

Managing director Nick Scrase said that by buying goods directly from producers and cutting out middlemen like export and import agents, IPL was able to deliver cost savings of around 10 per cent for Asda, which could then be re-invested in lower prices.

“We can pass savings on to customers through low prices and also invest in the producers,” he said.

Over the course of a year, IPL works with around 70 different countries. It is currently importing nectarines from South Africa, grapes from the US, and citrus fruits from Spain among others.

It also imports pate from Belgium, pasta and cheese from Italy, and cooked meats from Denmark, all of which are packed in other UK centres.

Mr Scrase said IPL’s rapid growth came immediately after the acquisition. “We went from just being a produce business to other areas, such as cooked meats, pate, pasta, cheese and wine, corned beef and canned goods,” he said.

He added: “With Wal-Mart we’ve got even greater leverage so we can go and buy a product like wine in South Africa, not just for the UK, but we can do it for other Wal-Mart markets, which reduces our costs and prices to customers.

“Wal-Mart also has a lot of capital so it can invest in our business model and help us to scale up more quickly.”

The controversy about the transportation of food long distances has been re-ignited in recent years as customers become more aware of where their food comes from.

But Mr Scrase said Asda had grown its local business “enormously” over the last two or three years and would continue to do so.

He added: “It’s a fact of life that some products we need to import. Whether it’s apples during the summer when there are no English apples around or nice Italian cheese which can only be made there because it’s a protected product.”

In the next few weeks, IPL is continuing its expansion with the opening of a bottling plant for its imported wine business. It will also start to import house plants and flowers from Kenya, Columbia and Holland.

In addition, it is looking to expand into tea, coffee and sugar over the next year.

Looking to the future, Mr Scrase said IPL would have a closer relationship with Wal-Mart. “I think we’ll be involved in initiatives in the US, Canada and South Africa,” he said.

Britain’s supermarkets are conducting a high-profile price battle at a time when disposable incomes are being squeezed.

Mr Scrase said: “It will continue to be tough for consumers, we don’t see that changing any time soon.”

IPL made a £6.1m pre-tax profit in the year to January 1 2011, up from £1.5m the previous year, according to accounts filed at Companies House. Turnover increased by 17.3 per cent to £58.4m over the period.

Asda is due to report third-quarter sales figures today.

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