From North to South, East to West Frigoscandia Rolls With the Best.

Information technology-driven logistics company provides all-important link in frozen food distribution chain which extends across the continent.

With the emergence of a single European market, Frigoscandia is in the right place at the right time as the Continent's leading third-party distributor of frozen and chilled food products. At the hub of the company's $400 million per year business (1998 figures) is an unsurpassed public refrigerated warehouse network.

From Umea in the north country of Sweden, south to Barcelona in sunny Spain, Frigoscandia's facilities are found in production areas where raw materials and finished products are stored. They are also placed at the crossroads of commerce where value is added to products which are assembled for later shipment, and in the heavy consumption areas awaiting final distribution to retail stores, restaurants and institutional kitchens. Other facilities are situated at major ports, such as Trondheim in Norway and Hamburg in Germany, where they serve as vital clearinghouses for temperature-sensitive imports and exports.

The traditional warehousing role has been replaced to a large degree by a logistics function linking producers and consumers. The turnover rate in the stores is rising and refrigerated services are becoming connected more closely with efficient transport systems, enabling rapid movement of small consignments of high-turnover goods to the next link in the distribution chain.

Successful and profitable integration depends on information systems which connect the producer, the service company and the receiver of the goods. Frigoscandia's logistics systems are built on a national basis and connected across borders, enabling the company to efficiently meet pan-European customers' requirements.

Frigoscandia has methodically built up transport operations in its warehousing markets. On any given day upwards of 1,000 refrigerated vehicles are rolling across Europe with payloads under Frigoscandia's care. Transport operations are adapted to meet conditions in each individual market, with subcontractors primarily used to get the job done.

Out-sourcing Strategy

"As firm believers in out-sourcing, we prefer to arrange transportation with professional hauliers, largely on an exclusive basis," said Peter Carlin, vice president of Frigoscandia. "There is no reason to take a major position of ownership in an oversupplied and price-sensitive trucking industry."

Frigoscandia's customers are food companies in the production, wholesale and retail sectors. Nestle, Albert Fisher, Unilever and Gelagri are among the largest. Cooperation with such customers often takes the form of a partnership with far-reaching integration, resulting in stable and long-term relationships.

Demand for Frigoscandia's services depends primarily on consumption of frozen food and ice cream. The largest consumption (inclusive of ice cream) still takes place in the United States, where 85 kilograms per capita are eaten annually. Next is Denmark, with 57kg. Then comes a three-way tie at 50kg among Sweden, Norway and the United Kingdom. The French consume 40kg per capita, while intake in Germany is 32kg.

Demand for frozen foods depends on a number of socio-economic factors, including standards of living, family structures and eating habits. Most changes in this regard indicate a continued growth in demand for frozens. In recent years the consumption of frozen foods in Europe has risen faster than average food consumption.

The public refrigerated warehousing market can be divided broadly into two segments. One is linked to food producers and includes storage of meat, fish, vegetables, fruits and other perishables. The second segment comprises distribution-oriented sites involved in the logistics of efficiently moving frozen foods and ice cream to wholesalers and retailers.

The profitability of a refrigerated warehouse depends on factors such as average capacity utilization and the turnover rate of the stored goods. These factors in turn are determined by harvests of vegetables, by the volume of slaughtered livestock, by the size of fishing catches, and by how consumption of frozen food and ice cream develops in competition with other types of food.

During the 1970s and '80s intervention storage of meat and butter utilized between 10% and 15% of total refrigerated warehouse capacity in Europe. The volumes stored were controlled to a large extent by political decisions. In the 1990s, with a gradual decrease in export subsidies required under the negotiated General Agreement on Tariffs and Trade (GATT), and stricter regulations governing intervention purchases, a downward adjustment to meet market conditions began. As a result, the need for intervention storage space declined.

Frigoscandia wisely prepared for this development by reducing its share of intervention storage to less than the industry average. Lower intervention storage has resulted in old, obsolete warehouses being driven off the market, while demand for modern, customized distribution stores has risen in pace with increased consumption of frozen foods and new distribution patterns.

Another important development is that food producers are continuing to subcontract distribution. A trend toward transferring this responsibility to specialist companies can also be seen in the retail trade. The EU market provides opportunities for rationalization both in production and distribution, which has created attractive possibilities for service-oriented Frigoscandia. A regional review of

how the company has positioned itself to serve the growing pan-European market for frozen and chilled foods follows.

FIRST IN FRANCE 

Strengthening and lengthening the links of Frigoscandia's cold chain in Europe is an ongoing process. Whether building from scratch or expanding through acquisitions, the company's growth track has always involved seeking out opportunities where economies of scale and logistics know how stand to benefit all involved in frozen food distribution.

Frigoscandia acquired all shares of France's leading public refrigerated warehousing operation, CEGF, in 1992 at a cost of SKr 659 million. Initially doing business under the Frigoscandia/CEGF banner, the name was quickly streamlined to Frigoscandia. In this way a strong national company was identified as fully integrated into a European network.

Frigoscandia is well represented in France's agricultural regions and ports as well as in the major cities and towns. The majority of leading frozen food manufacturers in the country are served by Frigoscandia, as are international fast food chains and distributors. All totaled the company operates 42 refrigerated warehouses nationwide with capacity exceeding 2,000,000 cubic meters.

In the northern outskirts of Paris lies the company's biggest distribution store in the nation, featuring 278,000 cubic meters of refrigerated space and blast freezing capacity of 24 tons per day. The Montsoult facility serving France Glaces Findus and Nestle has an automated in-bound and out-bound handling system for goods. All of France is supplied from this central store, which has capacity for 33,000 pallets and handles flows of approximately 280,000 pallets per year.

To the south-west of Paris lies the town of Trappes, where Frigoscandia operates a distribution warehouse with 99,160 cubic meters of refrigerated space. Clients include such well-known international groups as Grand Metropolitan PLC and the Tricon units (formerly PepsiCo) Pizza Hut and Kentucky Fried Chicken. From this location, frozen and chilled food products are delivered to wholesalers' depots and fast food restaurants nationwide.

It's all about Service

Service is uppermost on the list of what Frigoscandia provides for clients. For Tricon it takes care of everything from order taking, storage and order assembly to distribution and invoicing. But that's only part of it. The service covers the entire needs of every outlet -- from delivering servettes, cups and plastic cutlery to temperature-sensitive foods. In the Paris region Frigoscandia uses a dedicated transport fleet, while other areas of the country are served in cooperation with independent transport companies operating under fixed schedules.

Frigoscandia's French connection greatly benefits food producers on either side of the Channel which separates the United Kingdom and France. The company's international transport development arm in the UK works diligently to offer British exporters a fast and cost-effective distribution service to all parts of France. It provides the service from anywhere in the United Kingdom including its primary distribution center, and the customers' manufacturing locations. Goods are efficiently relayed to Frigoscandia's distribution centers north and south of Paris, and from there to final destinations. Both consolidated and full-load arrangements are available.

France is by no means the only country that Frigoscandia serves in this way. Similar arrangements exist in Scandinavia -- a region which consumes a large amount of frozen food on a per capita basis. The service extends to other parts of Europe, including Poland and the Czech Republic.

From the beginning, Frigoscandia has been a vital link between leading producers of frozen vegetables and the marketplace. In France it provides services for Bonduelle as well as Gelagri Bretagne. For Bonduelle -- which ranks as Europe's leading supplier of branded canned and frozen greens -- it handles raw material storage as well as storage and distribution of processed products.

Gelagri Bretagne, which is the country's largest agricultural cooperative, is engaged with Frigoscandia at a joint vegetable processing plant and adjacent warehouse in St. Caradec. Frigoscandia also handles straight warehousing distribution functions for the company in Landerneau and Loudeac.

The St. Caradec plant is situated in central Brittany, which lies in the heart of western France's highly productive vegetable growing region. The warehouse, with 90,000 cubic meters of space, forms a Vital link in Gelagri Bretagne's expansion plans. Apart from the storage services, Frigoscandia also compiles orders for both the French market and export customers.

In La Havre, one of France's major ports, Frigoscandia operates a refrigerated warehouse equipped for highly efficient handling of containers. In addition to normal services such as loading and unloading ships, storage and onward transport, Frigoscandia also packs and labels products for customers.

UNITED KINGDOM

Active in the United Kingdom since 1958, Frigoscandia serves most of Britain's leading producers of frozen packaged foods and ice cream, which are often both warehousing and transport customers. Indeed, Birds Eye Wall's (BEW) relies on Frigoscandia as its transport management company.

The transport operation started rolling in early 1999, in time to support the new BEW distribution center which was designed, built and managed by Power Logistics at Hams Hall, near Birmingham.

"The decision to appoint a transport management company was part of a wider review of all of our distribution requirements," said Keith Butler, company distribution manager at Birds Eye Wall's. "Frigoscandia is a natural partner and we look forward to developing our long-standing relationship still further."

Meanwhile, Britain's leading supplier of refrigerated logistics also fulfills national transport requirements for frozen and chilled food output recently acquired from UB by H.J. Heinz. Working under a long-term contract which runs through 2003, the arrangement involves moving a wide assortment of finished products from production plants to Frigoscandia distribution centers in Grimsby, King's Lynn and Bristol to make ready for ultimate delivery to retail and foodservice outlets.

"We see Frigoscandia as a strategic partner in the development of our supply chain," said George Ashall, the client's primary distribution controller. "Both companies share a common vision in respect of the service and broader transport and environmental issues faced by the distribution and food industry."

Frigoscandia also operates a factory warehouse and distribution center for the Sara Lee bakery company in Bridlington. The factory is right next to Sara Lee's production plant and handles both incoming raw materials and finished products, which are placed in interim storage prior to national or international distribution. Frigoscandia takes care of all transportation requirements.

One of Europe's most advanced temperature controlled storage, handling and distribution facilities is found near the North Sea in Grimsby, where Frigoscandia operates its Tower Primary Distribution Center. Boasting some 253,000 cubic meters of space, the refrigerated warehouse has 91 double-deep pallet bays and high-bay capacity for 30,500 pallets.

Situated within easy access to the motorway network, the refrigerated warehouse features a state-of-the-art technological and communication systems for cost-effective, responsive and efficient distribution.

The 34 meter high facility is equipped with automatic cranes linked to infeed and outfeed conveyors capable of handling 240 pallets per hour. Enclosed inbound and outbound bays are constantly kept at +2 [degrees] C.

Fast stock turns are guaranteed to meet shorter order lead times at consistently high levels of service.

With a market share of 30%, Frigoscandia is the leading distributor for British producers of frozen food.

The company operates 10 refrigerated warehouses in the UK. Total capacity is over 1.3 million cubic meters, corresponding to a volume share of 21%.

GERMANY

The market for frozen foods in Germany (excluding raw poultry and ice cream) climbed to 1,882,665 metric tons in 1998 as sales increased from DM 12.85 billion to DM 18.83 billion. While annual per capita consumption has risen to 32 kilograms, intake is still lower than in Denmark, the United Kingdom and Sweden. As such, growth potential continues to be high.

Distribution in the German retail trade is fragmented, with a large number of distributors working under contract with the retail chains. But this has been changing as third-party specialists have pointed out the system's low efficiencies.

The latest addition to Frigoscandia's operations in Germany is found in Lommatzsch, Saxony -- close to Dresden in the former DDR.

"Lommatzsch is an ideal location for many of Frigoscandia's customers who want to expand in central Europe," said Dirk Reinecke, who is both managing director of Central Europe and vice president in charge of mergers and acquisitions. "The investment is also in line with one of Frigoscandia's growth strategies -- to grow with existing large customers."

The Lommatzsch area is one of the most fertile vegetable areas in Europe and home of Elbtal (a vegetable producer within the German FRoSTA Group) since 1919. The company, which has had its own storage facility since production of frozen foods began back in the 1960s, began out-sourcing the operation to Frigoscandia in 1992. Frigoscandia is also serving other FRoSTA companies from its Bremerhaven warehouse.

"Elbtal enjoyed a strong growth in the 1990s and Frigoscandia agreed to build a new logistics facility, creating a `food town' in Lommatzsch," said Reinecke. "We now manage a total of 40,000 pallet positions in this area for ice cream, frozen vegetables, fruit and other frozen food. A substantial piece of land adjacent to the new warehouse has been secured and is available for future expansion."

For a while now Frigoscandia has been working with Exel Logistics Deutschland to jointly develop national distribution of temperature-controlled products. By combining the two companies' complementary services and infrastructure -- Frigoscandia's warehouses with Excel Logistics' distribution resources -- customers are offered complete, flexible and tailor-made solutions.

Sales of frozen food direct to households is an important part of the German market. One major Frigoscandia customer is the leading QFF home distribution company Milchhof Eismann.

Centrally headquartered in Duisburg (Fax: [phone]), Frigoscandia has consolidated its position in the German market and thoroughly covers the western and northern parts of the country. Ranking No. 2 nationally with a 16% share of the market, its 10 warehouses and distribution centers have capacity for about 879,000 cubic meters of space and 250,000 pallets. Annual throughput is in the range of 1.5 million pallets.

The company's Hamburg Logistics Center is tailor-made for special requirements and close to the free port warehouse of Frigoscandia Kuhltransit.

Bremerhavener Kuhlhauser Frigoscandia operates within Germany's biggest distribution center for fishery products. Among many on-site services provided are marine cargo handling, veterinary inspection and blast freezing.

NORDIC COUNTRIES

The nations that make up Scandinavia are increasingly regarded as a single market. Efficient distribution systems have emerged to make it possible to deliver fresh products with limited shelf life over greater distances. By linking together its operations in the Nordic countries, Frigoscandia offers complete solutions to customers' challenges, such as collection in one country and distribution in other countries.

Sweden

The Swedish market has increasingly adapted to conditions in the EU, as some domestic food production has been replaced by imports.

Frigoscandia operates eight warehouses and a number of transport depots and has over 300 vehicles in daily traffic throughout Sweden. Refrigerated space capacity totals 488,000 cubic meters, which corresponds to about 37% of the market.

The largest customers are Findus, Nestle, Unilever (GB Glace, Bake Off, etc.), Frionor and Spendrups. Frigoscandia offers them and others a wide variety of services including distribution through a nationwide network. Clients in more than 2,000 locations receive regular deliveries of frozen and chilled food products. By combining loads from different customers, Frigoscandia can provide fast and economic distribution of small consignments.

Norway

Fishing and salmon farming are key industries in Norway. Great quantities of frozen fish are exported to other European countries.

Frigoscandia is the dominant commercial refrigerated warehousing company in Norway with six facilities and total capacity of about 141,500 cubic meters. It does not operate transport organizations in the country, but covers the market through a cooperative agreement with Nordan Transport & Spedisjon.

The business focus is to serve the major food producers and distributors and to handle the growing distribution of fish in Europe. The most important customers are Nestle, Frionor and Norsk Kjott.

Denmark

Denmark is one of the most important agricultural countries in the EU, and also holds claim to the highest consumption of frozen foods among European countries. Since approximately 80% of all frozen food production is exported, the quantities of such products handled in Denmark are considerable.

Frigoscandia is the largest refrigerated warehousing company in the Danish market, with capacity of 292,500 cubic meters in five warehouses, which corresponds to roughly 21% of the country's total volume. Frozen packaged food and ice cream are the main items stored.

Modern distribution plants in Copenhagen and Kolding, coupled with an extended transport organization, mean that Frigoscandia effectively covers both Sjaelland and Jutland. In Aalborg, the company handles fish and shellfish caught in waters around Greenland and in the North Atlantic. Deliveries to markets throughout Europe are coordinated from a warehouse in Padborg, which is close to the German border.

Frigoscandia's strategy is also focused on serving leading export customers which have growth potential. Denmark is an important link in the Scandinavian distribution chain, which has been tied in more closely with Frigoscandia's European network.

The largest customers are Danish Crown, Steff Houlberg, Rahbekfisk and Frigodan.

CSI Expands in California With Warehouse at Tracy

CS Integrated LLC (CSI), headquartered in Liberty Corner, New Jersey, USA, is on the move again, with the opening of the newest facility in its national facilities and distribution network at Tracy, California.

Formerly a United Grocers retail distribution center, the plant has a 1.8 million cubic foot freezer, and a 1.6 million cubic foot cooler -- both of which are convertible. It is a fully racked CSI location, and also features 60-foot refrigerated docks, 33 truck doors, a 20,000 square foot truck shop, fuel tanks and parking for over 75 tractors and more than 60 trailers.

With RF technology in place, the Tracy facility complements other CSI locations in Northern California including Modesto, Stockton and Salinas. It will also be fully integrated into the comprehensive transportation programs CSI has in place serving the 13 western states from its facilities throughout northern California and distribution centers in Brea, LaHabra, Santa Fe Springs, Norwalk and Anaheim.

New Top Manager at ICF Unit, More Banana Shipments Too

Pia Ljunggren has been named manager of the Combined Transport sector's North-South Division at InterContainer-Interfrigo (ICF), Basel, Switzerland. Meanwhile, ICF has stepped up banana shipments from Antwerp to Eastern Europe.

Ljunggren replaces Rene Hellinghausen, chairman and managing director of ICF, who had headed the division on an interim basis since the relaunch of ICF as a pan-European network operator last fall.

To coincide with the appointment of its new manager, the division has also undergone structural reorganization. Three product management units with Gerhart Storp, Jochen Meyer and Norbert Sedlak as product managers and a traffic management unit with Kathrin Gollan as traffic manager replace the former management teams.

Banana shipments from Antwerp, Belgium, to Prague, Czech Republic, began in October 1998, and some 90 block trains carrying 55,000 tons of Chiquita bananas have made the trip since then.

Frigoscandia Moves into Czech Republic With Acquisition of Leuner Operations

Frigoscandia AB, Europe's largest provider of temperature-controlled logistics services, has acquired Leuner s.r.o., a leading Czech logistics provider for temperature-controlled foods. Leuner, which will be renamed Frigoscandia Czech Republic, has 25 employees.

"This acquisition is consistent with our strategy to offer temperature-controlled logistics services to key customers all over Europe," said Peter Carlin, vice president of the Frigoscandia Group. "The acquisition of Leuner adds a new key location to Frigoscandia's pan-European network. It also provides excellent opportunities for our existing customers, who will have access to a modern storage and distribution facility in the Czech Republic."

Leuner's refrigerated warehouse was erected in 1996 and is conveniently situated 13 kilometers south of Prague city center, next to the planned ring-road. Prague offers Frigoscandia a link between its distribution centers in Vienna, Austria and Lommatzsch, Germany. The 31,500 cubic meter storage facility may be expanded in the future, as Frigoscandia has also secured land adjacent to the building.

Frigoscandia plans to integrate the Prague site into its logistics network and further develop its existing customer relations and assets throughout Central Europe. Vincent Wildt, co-founder and former shareholder of Leuner, will remain as managing director of Frigoscandia Czech Republic. He now reports to Manfred Richter, operations director, Central Europe. Jan Pukl, deputy managing director at Leuner, has also decided to stay with Frigoscandia. With the Leuner acquisition, Frigoscandia now operates 88 refrigerated warehouses with a total capacity of 5.6 million cubic meters in Sweden, Denmark, Norway, UK, Germany, France, Spain, Austria, Italy and the Czech Republic. It employs almost 1,000 temperature-controlled vehicles all over Europe. Frigoscandia is part of ProLogis (NYSE:PLD), which also owns CSI, a leading temperature-controlled supply chain logistics company in North America.

Reuwer Appointed President Of USF Logistics Operation

Frank Reuwer has been named president and chief operating officer at USF Logistics, Long Grove, Illinois, USA.

Previously vice president of operations at USF Logistics, he succeeds Doug Chistensen, who moved up to president and ceo at USF Worldwide Logistics.

USF Logistics provides transportation management, dedicated fleet, contract warehousing and dedicated cross-docking.

Master-Bilt Unit Marks 60th Anniversary With New Market Strategy, New Products

In celebration of sixty years as a leading manufacturer of commercial refrigeration systems, Master-Bilt, New Albany, Mississippi, USA, has embraced an enhanced corporate strategy for the new millennium.

In keeping up with that strategy, the company has also announced several new products, including NSF-7 flooring for walk-in coolers and freezers, a multi-deck open-front frozen food merchandiser, and an improved beverage merchandiser.

Master-Bilt, part of the Standex Foodservice Group, is embarking on new directions in sales, marketing and customer service. It will focus on identifying key distribution partnerships that will open up new markets nationwide. This approach will provide for more solid customer service relationships with each `partnership' serving as a Master-Bilt product specialist.

The company has also appointed two new business development managers in the Eastern and Southeastern United States. Richard Burrows will be covering Georgia, and all of Florida, except for the Panhandle region; and Robert Enzor will be heading up the Carolinas, Virginia, Maryland, Delaware and the District of Columbia. Between them, they have almost 20 years of industry experience.

The recently-introduced NSF-7 flooring system is designed to improve floor traction and to make clean-up easy and bacteria free. NSF-7 flooring is manufactured with .080 gauge rust resistant aluminum with a rounded, raised diamond tread pattern.

In an industry where safety and cleanliness are major concerns, Master-Bilt has designed its flooring as an alternative to traditional rubber mats or traction stickers associated with messy clean-ups and health risks. The NFS-7 flooring reduces "slip and fall" accidents on wet or sticky surfaces without the addition of any topical non-slip devices. The all-in-one textured surface allows spills to be easily wiped up, without anything getting caught in grooves.

Master-Bilt's foamed-in-place floor is built tough to endure everyday use. The new NSF-7 flooring is available now as standard on Master-Bilt walk-in coolers or freezers. Other new products from the company include:

* The Multi-Deck Open Front Merchandiser, MD Series, a multideck reach-in featuring solid, heavy duty pull down night curtain, electronic lighting. It is available in single unit or modular continuous design, in six foot and eight foot lengths.

* The Enhanced Beverage Merchandiser, Model HBC-36. A new and improved aversion is now equipped with a standard removable laminated white formica counter top. This allows the system to work as a freestanding or undercounter unit.

For more information on Master-Bilt's full product line, call Rhonda Clement at 1-800-647-1284.