Keelings, the Dublin-based food distribution firm, has won the contract to manage a new £20 million (€25.4 million) distribution depot for Tesco Ireland.
The depot and distribution operation, which will be at a greenfield site near the M50 at Ballymun, will handle all chilled, fresh and frozen food for Tesco Ireland and will create 350 jobs in the area.
Some two-thirds of Tesco Ireland's products by volume, and more than £700 million worth of products in value, will be consolidated in the multi-temperature facility every year.
The centre is expected to open in mid-2001 and, when fully operational, will handle about 35 million cases of product a year.
Keelings has acted as consolidator and sole distributor of Tesco's fresh fruit and vegetables for the last year and, as reported in The Irish Times last month, was the front-runner to win the contract.
"This marks a substantial development for our company. It will increase our scope and expand the nature of our operations, making us one of the major logistics operators in this country," said Mr Joe Keeling, managing director.
The firm employs more than 400 people and has an annual turnover of around £150 million. It is also one of the leading suppliers of fresh produce to Tesco in Britain.
The new facility is the final step in Tesco Ireland's three-stage strategy to consolidate distribution to its stores.
The company recently completed a £5 million investment in upgrading its existing depot in Tallaght where all fast-moving groceries are being consolidated for distribution.
Earlier this year, it appointed British group Exel Logistics to manage a second centre, which caters for slow-moving grocery and non-food products such as washing powder and baby foods, at Ballymount in west Dublin.
The move to centralise its distribution reflects a general trend in the Irish market. Musgraves has invested heavily in the last number of years on new centralised distribution operations in Dublin and Cork. Dunnes Stores and Superquinn are expected to follow suit.
When fully operational, Tesco's new distribution system will allow about 95 per cent of goods for its 75 Irish stores to flow through these depots compared with 35 per cent at present and just 5 per cent two years ago.
