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November 8, 2023
FOOD wholesaler Monument Foods is to open another factory, two years after it plucked South Tyneside business Rae’s Bakery from potential closure.
The Sunderland company will set up another premises in the city to allow it to expand its product range and offer higher-end items such as pastries, cakes and savories.
It is also considering brand franchising as it bids to expand its footprint in the region over the next few years. Monument Foods director David Thompson said he was confident the investments would “result in a significant boost to the business within a relatively short timescale”.
The company is eyeing up a 10% annual growth on its present turnover of £2.5m.
Thompson and Tracy Lyons took over Rivergreen Industrial Estate- based Monument Foods eight years ago and altered the business from one that brought in products to sell to retailers to a firm that sold its own products.
The resulting demand for bread products led it to purchase a bakery and forge long-term contracts with schools, and the company’s staff numbers have swelled from six to 60.
Around two years ago, it jumped on the opportunity to buy Rae’s Bakery in South Shields through a share sale transaction, just as the company’s owners were considering liquidating the business and heading into retirement.
Rae’s sold around 60,000 buns to schools, retailers and sandwich shops a week, but Monument has doubled this number. It has also pushed up staff numbers from 13 to 27.
David Thompson said: “We’re confident that the investments we’re making now will result in a significant boost to the business within a relatively short timescale, and whilst we’re pleased to have reached this milestone, we know there’s more for us to do both within and outside the North East in the medium and longterm.
“A perfectly sound company would have gone out of business if we hadn’t stepped in to take over Rae’s, and the results we’ve achieved since show the commercial sense that taking it on made for everyone involved.”
The share sale of Rae’s to Monument was facilitated by Linda Farish, who is chair of insolvency trade body R3 and director of recovery and insolvency at Newcastle accountants RMT.
She said: “Rae’s had tried but failed to sell the business on their own, and they were advised to put it into liquidation, but by looking at all the options, we were able to secure a successful sale outside the usual insolvency proceedings and hence keep the company going under new management.
“At a time where business insolvencies have become all too common, companies with the vision to take on the operations or assets of such firms can gain a real commercial boost at a potentially much-reduced cost.”