SCOTLAND'S Baxters Food Group is acquiring a fellow household name with a deal to buy the business and brand of Fray Bentos, best known through the generations for its canned steak and kidney pies and puddings.

Baxters will transfer production of Fray Bentos’ products, which include tinned corned beef and meatballs as well as its range of pies and puddings, from Long Sutton in East Anglia to its headquarters at Fochabers in Moray.

A spokesman for Baxters said that this would lead to the creation of a “substantial” number of jobs, with the shift of the Fray Bentos production involving the addition of a canning line at a Fochabers plant which currently employs more than 400 production staff.

He would not put a figure on the job creation at this stage, noting the deal had only just been done.

Baxters highlighted plans for “substantial capital investment” at Fochabers to accommodate the Fray Bentos production, and declared it has “many exciting ideas to revitalise the brand” with the aim of securing a strong presence in the canned meat market.

Fray Bentos was set up in 1899, and named after the town in Uruguay in which it has its roots. It supplied food for soldiers during the First World War.

Although it has a rich history, Fray Bentos is slightly more youthful than a Baxters business which was founded in 1868.

Baxters is buying the Fray Bentos business and brand from Princes, which is owned by Mitsubishi of Japan. Princes is selling the Fray Bentos business, which came into its stable with a wider £182m acquisition of Premier Foods’ canned food business, to satisfy UK competition authorities’ concerns over this purchase earlier this year. Princes also acquired the Crosse & Blackwell brand in this purchase from Premier Foods.

The price which Baxters is paying for the Fray Bentos business was not disclosed.

However, the Fray Bentos business being acquired has annual turnover of about £30 million. The deal is therefore a very significant one for Baxters, which is best known for its soups. The latest available accounts of Baxters, which has operations in Poland, Canada and Australia as well as in the UK, show that it raised its turnover from £124m to £129m during the year to May 29, 2010. The company, which employs about 900 people in total, increased its pre-tax profits from £5m to £6.7m in the year to May 2010.

Baxters chairwoman Audrey Baxter said: “Like Baxters, Fray Bentos is a heritage brand and is known the length and breadth of the country, holding a special place in the hearts of British consumers both young and old.

“We have many exciting ideas to revitalise the brand as we aim to secure a strong foothold in the canned meat market. Highlighting Baxters’ expansion moves in recent years, she added: “As a business we have constantly sought out new opportunities, most recently through successful acquisitions in Canada and Australia and we also invested in a new-build Polish manufacturing operation. Fray Bentos will provide an array of opportunities to develop our position in the UK market and internationally.”

“Manufacturing of the Fray Bentos products will transfer over the next 12 months to our Fochabers production facility. A substantial capital investment programme has also been approved to enable all the plant, machinery and production lines to be housed on-site.”

Asked how many jobs would be created at Fochabers, the Baxters spokesman replied: “There will be a substantial number of new jobs. It won’t be tomorrow. It will take about 12 months for the plant to get moved up. It is good for the (local) economy.”

Scottish rural affairs secretary Richard Lochhead yesterday welcomed Baxters’ acquisition of the Fray Bentos business and the plans for job creation and investment at Fochabers.

He said: “It’s great to see this iconic Scottish company going from strength to strength, growing and investing in Scotland.

“The jobs and investment in Fochabers are further proof – if it was ever needed – that Scotland is at the heart of the global food business.”

Mr Lochhead added: “I want to see more companies matching Baxters’ plans for growth and I applaud them for their continued ambition. Despite a tough economic climate, Scotland’s food and drink sector has continued to perform, with latest figures showing annual turnover hit a record high of £11.9 billion, and I’m confident of a very positive future for the industry.”

Baxters, which describes itself as a “manufacturer of premium ambient food”, supplies retail and foodservice customers in the UK and overseas markets. The Baxter family has been producing food for four generations.

Its range also includes savoury sauces, sour pickles, sweet sauces, preserves and salad accompaniments. These are sold under a variety of brands.