Duc, the French group which is Europe's leading producer of quality-certified poultry products, has signed a new agreement with which will see it provide technological know-how to the Ukrainian poultry processing units of the Ruby Rose company.

The two companies have signed an eight-year agreement which will come into force on 1 December. For an initial period of seven months (until June 2003), Duc will carry out an audit of the facilities in Ukraine, at the end of which time it will draw up a list of recommendations for improving productivity there, as well as detailing the likely costs and methods involved.

As of 1 August 2003, Duc will take control of the day-to-day management of the Ruby Rose facilities and begin the implementation of the business plan.

The French company said that the agreement with Ruby Rose was ideal because it not only allowed it to begin international operations for the first time but also to effectively double the size of its business without any capital investment. Duc said that the agreement stipulated that it would receive a percentage of quarterly operating profits in payment for its know-how.

Ruby Rose has also agreed to deal exclusively with Duc and will in time transfer control of all its poultry production facilities in Russia, Kazakhstan, Azerbaijan and other former Soviet Republics to the French company.

"For the last two years we have been studying all the opportunities which would allow Duc to make the most of its considerable expertise to boost its international presence while at the same time minimizing the financial risk to the company," said François Gontier, Duc's president.

"This project fits that bill exactly. Ruby Rose is a group which has the necessary funds to meet its ambitious plans, and its business is based in a dynamic region of the world where industry is developing rapidly."

The company added that Ruby Rose had been impressed by Duc's integrated approach to poultry product production, which covers every step in the process, from the breeding of chickens to the processing and sale of the final product.

The French group is also predicting a substantial improvement in its results following the agreement, and said that the first benefits would be seen by the end of next year. In 2001, Duc's sales reached €142.7 million, while first half sales for 2002 were €66.2 million.