MKM Building Supplies has won a multi-million-pound contract to supply an East Yorkshire house builder.
Midas Homes in Raywell appointed the merchant as its preferred supplier of building, plumbing and heating products after a tendering process.
MKM saw off bids from some of the UK's biggest national chains to win the work.
Midas Homes director David Coates said the company decided to go out to tender to streamline its purchasing activities.
He said: "We have historically used a mix of builders' merchants, some local, some national, depending on the location of the development we were working on.
"But we found this was not the most efficient way of working and didn't always result in best value.
"So we decided to go out to tender, based principally on targeting the key deliverables of product quality and quality of service."
Although the contract is not limited to a specific timescale, it will be reviewed on an on- going basis and will strengthen the already close ties between the two firms.
They started working together almost 20 years ago, just as the builders' merchant was becoming established.
MKM was founded by current executive chairman David Kilburn and Peter Murray in Hull and has since grown to be the UK's largest independent supplier of construction materials.
Mike Thomas, joint branch director of MKM in Hull, described the contract as "great news" and said it would lead to the recruitment of two new staff members.
He said: "Midas Homes has been a great customer to us over the years, but this deal really puts our relationship on a whole new footing.
"Obviously, with us both being local companies and having worked with Midas for nearly 20 years we believed the contract was ours to lose, but we are never complacent.
"We put together an extensive package, which we think will bring a lot of benefits to Midas going forward and hopefully ensure the relationship endures for another 20 years and more."
Midas Homes focuses on void work, restoring empty local authority housing to bring it back into use.
It is a contractor for Kingstown Works, which is responsible for the maintenance and repair of Hull City Council's housing stock and other private sites.
The company also builds new homes and is working on developments including 11 bungalows at Greenways in Driffield.
