LuLu invests $22 million in UK hub
Major retail conglomerate to expand operations in Europe
LONDON: Retail giant LuLu Group International, headquartered in the UAE capital, has confirmed it is investing £15 million ($22 million) in a new 124,000 square feet European headquarters in Birmingham’s Advanced Manufacturing Hub, with the creation of 80 jobs.
Through its UK-based subsidiary, Y International, LuLu Group will process, package and export 10,000 different products from the Midlands to more than 160 hypermarkets across the Middle East, Africa, Asia and the Far East.
Y International works with a wide range of businesses, transporting UK products 3,000 miles to the Gulf and beyond.
Its suppliers include Lovemore, a gluten-free, baked goods company from Aberdare, Wales; Somerset-based The Traditional Free Range Egg Company and Mission Foods, which produces flatbreads in Coventry.
LuLu Group’s portfolio includes hypermarkets, shopping malls, trading, shipping, IT, travel and tourism and education. The company has an annual turnover of more than $6.9 billion (£5.2 billion).
Tony Perks, director of operations at Y International UK, said: “When comparing potential locations, Birmingham offered a cost-effective and well-connected location, as well as readily available, high-quality space, making our decision easy.
“The acquisition of the land gives Y International the opportunity to construct a large purpose-built production facility. This will enable the company to increase sales and is expected to result in an increase in staff from the existing 160 to 240, all recruited from the local area.”
Y International is expected to move from its current base to the new larger base in around 12 months’ time.
Charles Spicer, a director at Savills, the real estate agent that helped to broker the deal, told Arab News: “Birmingham has a ready supply of developable land. The regenerated site is close to the old site, which means employees can still walk to their jobs and Y International has access to a good supply of labor.”
He added that the new building would be nearly six-times larger, reflecting the large-scale growth plans for LuLu.
Rabia Yasmeen, analyst at research firm Euromonitor, said: “LuLu Group’s move to establish a distribution center in Birmingham has been a longstanding plan for the retailer — the company announced similar plans in 2013 when it wanted to export British branded foods to the Middle East. With the size of the investment increasing significantly since then, the current move shows the group is planning a wider strategic move.”
Yasmeen added that LuLu Group has been following active expansion plans within the Gulf Cooperation Council, as well as India and Malaysia.
The Euromonitor analyst said: “UK operations are aimed at expanding the operational base for food processing, packaging and export to other regions where the retailer is already present; however the group is also reported to have recently acquired in Scotland the Waldorf Astoria Edinburgh — The Caledonian, which is also indicative of active investment by the group in the region and wider European operations.”