KYLEMORE Bakery will invest £3.5 million this year to win a slice of the part frozen bread market, currently dominated by Cuisine de France. Turnover at the company has risen by 12 per cent to £22 million in the year to April 1996.

The family firm, which employs 800 people nationally, has its main bakery at McKee Avenue in Dublin's Finglas.

Part baked frozen bread allows corner shops, garages and supermarkets to bake their own fresh bread on the premises. The new production line being installed in Finglas will make up to 2,500 part frozen baguettes or 10,000 rolls per hour.

Apart from French bread and brown bread, Kylemore's new "in store bakeries" will also produce confectionery items such as Danish pastries, doughnuts scones, muffins and apple tarts.

All these will be sent partly baked and frozen from Finglas to the shops, where they will be finished in ovens supplied by Kylemore. Part frozen hamburger buns will also be produced.

"We need to bring hot bread back to the customer," says Kylemore's managing director, Mr Brian Hogan.

After about 8 p.m. during the week and on Sundays, most bread products start to show their age. Kylemore expects its crusty bread products baked in the shop to sell well at these times.

The planned in store bakeries will be much larger than the oven in a corner which has been seen up to now in many shop's. In many cases, there will be a separate counter and the Kylemore brand will be prominent at the point of sale, though the company will also supply the generic trade in multiple stores.

A working prototype of the new in store bakery will be displayed at the IFEX food show in Dublin in June. Kylemore claims, that, a minimum level of skill and a few days training, are all that is required for shop personnel to operate the highly automated ovens.

"If you can make toast, you can bake this bread," Mr Hogan said. This is in contrast to the old system of bakery apprenticeship, which lasted four years.

"Cuisine de France have done a good job in creating a market for part frozen bread," Mr Hogan said. "This is different. The in store bakery will be much bigger - the next generation."

The firm currently supplies, Quinnsworth, Dunnes, Superquinn, Supervalu and independent supermarkets, with its products.

The retail value of the part frozen bread trade in the Republic and Northern Ireland, is currently estimated at £30 million.

Much of the dough and technology required by this sector is, currently imported. Most of the frozen food wholesalers are currently involved. Kylemore says its expansion has the support of, Forbairt, on the basis that it represents import substitution.

The expansion has been planned for the last two years. Apart from new facilities in Finglas, the £3.5 million investment will be used for a new frozen distribution network. Vans must be kept at a constant minus 8 degrees Celsius.

"The whole thrust of Kylemore now is toward part frozen products," said Mr Hogan. "It is a logical extension of our bakery business. People want fresh, continental type breads from their, local shops.

Kylemore has no wish to plunge into the sliced pan market, where there has been rationalisation for 10 years and where there is probably still a massive overhang of capacity, he said. As in the food business generally, the bakers enjoy a steady trade but gross margins are tight, about 5 per cent last year.

Kylemore's bakery generates 65 per cent of the group's turnover.

"The various parts of our business are a good foil for each other," said Mr Hogan. "In good times, the restaurants do better. In bad times people buy more from the supermarkets, which benefits the bakery."

Kylemore, founded in 1920 makes up to one million bread and confectionery items per week. More than 300,000 customers per week visit its 40 shops and nine restaurants.

The firm recently opened a shop in Derry and will be located in Blanchardstown and some of the planned new Dublin shopping centres. Cafe Kylemore will open in Britain, too, within the next couple of years, probably in a shopping centre outside London.

Mr Hogan became managing director of Kylemore in 1979 and bought out 80 per cent of the equity in 1989. Since then employment has doubled and it has become a major player in the non sliced bread market. The firm's main competitor in the restaurant business is Bewleys.