Guarantee for cookie machine generates growth in Danish town of Hedensted

Jacobsens Bakery was the first business to be granted a capital expenditure guarantee. The bakery was almost sold out of cookies in 2012 and had to invest in a new production line to be able to keep up with demand from Asia. EKF provided a guarantee for the loan, thus securing better credit conditions from the bank, and a new production line was a reality.

Case facts

What: Production line for baking cookies
How much: Approximately DKK 40 million
EKF's role: EKF provides a guarantee to the bank for 80% of the amount

EKF product: Capital Expenditure Guarantee
When: 2013-2023

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The challenge

In 2012, we were almost sold out even with all production lines running. We therefore realised that we could not grow sales without investing in new production facilities
Jan Jacobsen, CEO of Jacobsens Bakery

Jacobsens Bakery was founded in 1962 and produces Danish butter cookies packed in decorative tin cans. Jacobsens Bakery is one of only two remaining cookie manufacturers in Denmark.

The production of cookies started in the town of Hedensted at a small factory, but the business has subsequently grown and today posts a nine-digit turnover. Of this, exports make up 99% of the volume to 80 countries. Over the past five years, the business has grown in terms of both sales and earnings.

The demand for the original Danish cookies is particularly strong in Asia. Jacobsens Bakery needs to expand its production facilities to be able to keep up with demand.

“In 2012, we were almost sold out even with all production lines running. We therefore realised that we could not grow sales without investing in new production facilities,” says Jan Jacobsen, CEO of Jacobsens Bakery.
The process

Jacobsens Bakery decided to invest in a completely new production line that could produce all kinds of cookies.
After having read in the newspaper that the rules had been changed, allowing EKF to help out with the financing for establishing factories and machinery in Denmark, Jan Jacobsen contacted EKF.

“At that time, all our material had been prepared, including budgets and feasibility studies. We sent it to an EKF advisor, who got back to us shortly after, and then we were underway,” says Jan Jacobsen.

Together with EKF, Jacobsens Bakery obtained loan offers from three banks to finance the new production facilities. The company chose the bank offering the best conditions.

“Because of the EKF guarantee, we obtained a financing solution at very reasonable conditions. A loan backed by EKF means a lower risk for the bank, which gives us better credit conditions,” Jan Jacobsen continues.
The solution

With the financing in place, Jacobsens Bakery ordered the new production line, which can produce even more of the popular cookies.

“This means that our capacity will be expanded considerably. Over the next four to five years, we can still grow without having to make new investments”, Jan Jacobsen concludes.

This will provide additional work for all of the 150-strong staff at the bakery in Hedensted.

Moreover, the new expansion means that it will still be profitable to maintain production in Denmark.