Press release

Stonegate Merge with Deans

14 July 2006

Picture: Peter Dean (left) and Michael Kent shake on the deal

The two biggest names in the egg industry have merged their business interests to form a new company which promises to become the UK’s undisputed leading supplier of eggs and egg products.

Deans Foods and Stonegate have combined to form Noble Foods Ltd in a deal that leaves Peter Dean and Michael Kent, who currently head up the family firms of Deans and Stonegate, with a joint and equal share in the new business.

While Mr Dean will become chairman of a new six-man board, the running of the enlarged group will be the responsibility of chief executive Mr Kent. Both men were born into egg businesses and have spent their working lives in the industry building their respective companies.

Other board members are David Tromans and Andrew Joret from Deans, while coming in from Stonegate is Nick Rogers. Their roles within the new company are yet to be announced. Deans’ recently appointed finance director Mark Stott completes the board line-up and retains his role.

Noble Foods will have its head office at Tring, Hertfordshire, but both Deans and Stonegate will continue to operate from their existing bases for the purpose of supplying retailers and buying producers’ eggs with little change in current procedures, says the company.

In a joint statement Peter Dean and Michael Kent say the new company will be better placed to meet the increasing economic challenges and future legislative pressures facing the egg sector.

“If the UK industry is to continue to provide consumers with the type of eggs they want at an affordable price, it must be organised to optimise the supply chain process of collecting, packing and distributing eggs,” they said.

“Both our companies are expert in this field but we believe that by coming together and exploiting the synergies between us, we can create a streamlined, world class company, fit to face the challenges ahead.

“This will ensure a successful future for our employees and our egg suppliers while providing an unrivalled service to our customers together with great value for consumers.”

Under Peter Dean’s leadership Deans Foods, a company started by his father and uncle, has grown into the UK’s most successful egg operation and many in the industry will be left wondering why he’s merged the business with Stonegate.

In an exclusive interview with the Ranger, Mr Dean revealed that personal circumstances had influenced his decision.

“I always thought I’d be running this business until I took my last breath but during recent years I began to receive approaches for the company and it set me thinking about the future, not only for Deans Foods but for me and the family,” said 61-years old Mr Dean. The family’s view was that he needed to reduce his work load and start to enjoy at least some form of retirement. But potential purchasers for the company wanted him to continue to run the operation.

Then discussions began with Michael Kent which culminated in what Mr Dean describes as the ideal situation and one that has enabled him to realise some of the financial stake he holds in Deans Foods.

“I will retain a half share of the business and be involved in the overall management of the group at board level but the cut and thrust of running the business will be in the very capable hands of Michael Kent.

“Whilst these negotiations have been going on I’ve had the opportunity to take a close look at the Stonegate operation.

“There’s no doubt that Michael is a very efficient operator and I’m confident he’ll impose the same level of efficiency on the new business. That promises to bring benefits to everyone with an interest in the egg supply chain, right from producer level through to consumers.”

And Michael Kent is confident producers will quickly benefit from these new-found efficiencies.

“The whole future of the business is centred on using our joint marketing skills to drive forward the sales of free range and organic eggs and to achieve that we are totally reliant on a supply base that is both profitable and sustainable in the long term,” he told the Ranger.
But the new chief executive admits that producer returns have fallen to a point where there is little new investment in the sector.

“We have got to get extra money back to producers and it has to happen quickly,” he said. “It is an overriding priority for the new business.

“That money will come from operating efficiencies. Just taking transport alone the potential for cost-savings is huge considering the crisscrossing of Deans and Stonegate vehicles that currently goes on. And there will undoubtedly be improvements in packing efficiencies. The net result of which will be to drive money back into the supply chain.”
Mr Kent also believes that producers will be able to look forward to more stability in the market.

“Matching supply with demand has never been easy and in the past getting it wrong has led to Deans and Stonegate carrying surpluses at times.

“This adds to downgrading costs which ultimately impacts on producer prices. The new company will be in a much better position to manage this.”

Underlining Mr Kent’s vision that free range and organic is the future is a recent £5 million investment in Stonegate’s dedicated free range and organic egg packing operation at Lacock in Wiltshire.

“When the work is finally completed in September the centre will be packing 6000 free range and organic eggs every minute,” claims Mr Kent. “The ultimate aim is to see that level of efficiency rolled out across the whole company.”