Wednesday 26th Oct 2016 - Logistics Manager

Hungarian acquisition for TDG

TDG has acquired Hungarian transport business RRS Logistics in a move that enables the group to extend its full range of services in Central and Eastern Europe.

RRS Logistics provide flexible and asset-light transport services to the Hungarian market, serving customers including Friesland Foods and Cerbona as well as providing services for a number of domestic logistics providers.

RRS was set up in late 2007 by managing director, Ferenc Federer. It works with a series of selected local transport companies to provide  on a 4PL basis. It currently manages, plans and executes an average on 200 vehicle routes and handles 4,500 pallet equivalents per day.

Kevin Richardson, TDG’s strategic development director said: “Having initially set up operations to focus on the provision of international services, this acquisition allows TDG to expand its services into the Hungarian market by offering a high quality domestic transport capability. Strategically the acquisition extends our current 4PL capability into a new geography as well as complementing our current operations in the region.”

Ferenc Federer said: “With such established and highly successful 4PL operations for customers such as Corus and Aggregate Industries in the UK, TDG totally understands the scale potential offered by the RRS operating model. This is a spring board from which to both extend their service offerings and support their geographic expansion strategy”.

Working as part of TDG’s International Services Business Unit under the direction of David Barron, RRS will be part of TDG Logistics kft and will concentrate on both expanding its current base and extending its services that now include full end to end capability.

TDG maintains operating profits

TDG has maintained its underlying operating profit despite a ten per cent fall in sales as a result of the recession, parent group DouglasBay Capital has said in its pre-close trading update. These are like-for-like figures that exclude restructuring costs and sales & leasebacks.

TDG has been reorganised into four main business units based on capabilities: contract logistics, freight forwarding, transport and bulk liquids storage. In addition, DouglasBay said, chief executive Mike Branigan had addressed the difficult environment early on with rigorous cost controls.

During 2009, “TDG’s financial position strengthened substantially with half of the bank debt taken on by the company at the time of the acquisition repaid on the back of strong operational cash flows and property disposals”.

Some £40m was raised through property sales. A new company DouglasBay Property Group was set up to manage the group’s property portfolio. It currently owns and manages two developments – a 125-acre site at West Hallam and an 11-acre site at Carnforth which were previously held within TDG. DBPC is also working with TDG to manage the 130 sites occupied by the business.

DouglasBay said that further debt repayment was planned for 2010 from further property disposals and TDG’s operating cash flow.

Overall, the group said TDG was well positioned to take advantage of improving economic conditions and slowly recovering trade volumes. Full year results are due at the end of April.