Pioneering salad producer John Baarda Ltd has agreed a strategic tie-up with Dutch marketer The Greenery UK that secures Baarda's future and expands The Greenery's presence in this country.

Under the deal, expected to complete later this month, The Greenery UK will guarantee an HSBC loan to Baarda to refinance the Yorkshire company. In return Baarda will market its tomatoes, cucumbers and peppers through The Greenery UK.

Baarda has been struggling financially for some time and industry sources said the deal should ensure its survival.

The most recent accounts filed at Companies House, for the year to 31 December 2007, show that Baarda made a £3.6m pre-tax loss on a turnover of £25.8m with liabilities exceeding its assets by £6m. In their report on those accounts, the auditors wrote that there was "material uncertainty, which may cast significant doubt about the company's ability to continue as a going concern."

Until Thanet Earth arrived on the scene, Baarda was held up as the flagship UK salads supplier after opening its groundbreaking Billingham glasshouse in collaboration with Terra Nitrogen three years ago. As well as providing UK tomatoes year-round to Sains­bury's and other customers, the site has strong environmental credentials. It uses excess Co2 from Terra's nearby ammonia manufacturing site within the glasshouse to aid the growing process, thus preventing thousands of tonnes of emissions from being put into the atmosphere.

"This development will allow us to focus on growing and the further development of the nursery at Billingham," said Baarda MD David Baarda.

The Greenery UK's MD Kevin Doran described the move as a "very good strategic fit for our business".

The Dutch company has carved a strong position for itself in the UK recently. It already supplies produce from another major glasshouse supplier, Corner­ways Nursery, and this week's announcement strengthens its hand further. It is unclear what the deal means for supermarket supplier Fresh Link Marketing, through which Baarda currently sells its produce.

The UK tomato market has proved tough in recent years, with a number of suppliers falling by the wayside. According to one leading supplier Baarda had struggled to cope with the cost of growing salad crops under lights during the winter. "The pressure on price has been absurd to the point of being unsustainable," he said. "You have to be operating to Dutch industry standards to survive."