SunOpta Advances Strategic Plan With Two New Initiatives
February 01 2021 - 6:30AM
Business Wire
Additional capital investment in plant-based
manufacturing capacity
Manufacturing footprint consolidation in
frozen fruit operations
SunOpta Inc. (“SunOpta” or the “Company”) (Nasdaq:STKL)
(TSX:SOY), a leading healthy food and beverage company focused on
plant-based foods and beverages and fruit-based foods and
beverages, today announced an additional investment in its
Plant-Based Foods and Beverages segment. The investment will
further expand the capacity of its Allentown, Pennsylvania plant.
In addition, the Company announced the exit, effective February 1,
2021, from its Santa Maria, California frozen fruit processing
plant. These initiatives are part of a multi-year supply chain
optimization strategy to support our growth plans.
“I’m pleased to announce the further expansion of our
Plant-Based Foods and Beverages production capacity. This project,
in our Allentown, Pennsylvania plant, follows the completion of
three large projects in the fourth quarter of 2020 to accelerate
the growth of our plant-based business. We expect this new capacity
to come online in the fourth quarter of 2021. We remain pleased
with our sales pipeline efforts to deliver $100 million of revenue
growth by the end of 2022 from the three 2020 projects. This
additional capacity will ensure that we are well positioned to
support our customers’ growth in 2022 and beyond,” said Joe Ennen,
Chief Executive Officer of SunOpta.
“We are closing our frozen fruit processing plant located in
Santa Maria, California effective February 1, 2021. This closure
will reduce the cost basis in our frozen fruit business, while
leaving ongoing relationships with growers intact and ensuring
adequate capacity to service demand for years to come. The highly
successful automation and productivity efforts made over the last
two seasons have created the ability for us to operate the same
size business, with fewer assets. Lowering our cost structure will
improve gross profit, which we expect will make us more competitive
as we seek to add new business. Finally, given the plant closure,
we are using this as a catalyst to evaluate marginally profitable
or unprofitable customers and SKU’s, which may lead to some
customer and SKU rationalization,” said Mr. Ennen.
About SunOpta Inc.
SunOpta Inc. is a leading company specializing in the sourcing,
processing and production of organic, natural and non-GMO plant-
and fruit-based food and beverage products.
Forward-Looking Statements
Certain statements included in this press release may be
considered "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation, which are based on
information available to us on the date of this release. These
forward-looking statements include, but are not limited to, our
expectation that the new capacity will be available in the fourth
quarter, the Company will be more competitive and able to add new
business by lowering its cost structure, and that customer or SKU
rationalization may occur. Terms and phrases such as “expected”,
“may”, “plans”, “believe”, “will”, “continue”, “anticipate”,
“estimates”, “should”, “would”, “intend” and other similar terms
and phrases are intended to identify these forward-looking
statements. Forward looking statements are based on information
available to us on the date of this release and are based on
estimates and assumptions made by the Company in light of its
experience and its perception of historical trends, current
conditions and expected future developments as well as other
factors the Company believes are appropriate in the circumstances
including, but not limited to, the Company’s actual financial
results; management’s assessment of the incremental capacity and
margin to be realized from the expansion and capital investment
projects for which the proceeds of the transaction will be used;
current customer demand for the Company’s products; the anticipated
impact of COVID-19 on the Company’s sales and productivity; general
economic conditions; continued consumer interest in health and
wellness; the Company’s ability to maintain product pricing levels;
planned facility and operational expansions, closures and
divestitures; cost rationalization and product development
initiatives; alternative potential uses for the Company’s capital
resources; portfolio optimization and productivity efforts; the
sustainability of the Company’s sales pipeline; the Company’s
expectations regarding commodity pricing, margins and hedging
results; improved availability and field prices for fruit;
procurement and logistics savings; freight lane cost reductions;
yield and throughput enhancements; and labor cost reductions. The
Company makes no representation that reasonable business people in
possession of the same information would reach the same
conclusions. Whether actual timing and results will agree with
expectations and predictions of the Company is subject to many
risks and uncertainties including the inability to satisfy, or
potential delays in satisfying, any of the closing conditions
applicable to the transaction; the availability and attractiveness
of potential high-return capital investments and synergistic
acquisitions for the Company; delays or other potential issues in
enabling the acceleration of near-term expansion plans in our
fast-growing plant-based food and beverage segment; potential loss
of suppliers and customers as well as supply chain, logistics and
other disruptions resulting from or related to COVID-19; unexpected
issues or delays with the Company’s structural improvements and
automation investments; failure or inability to implement portfolio
changes, process improvements, go-to-market improvements and
process sustainability strategies in a timely manner; changes in
the level of capital investment; local and global political and
economic conditions; consumer spending patterns and changes in
market trends; decreases in customer demand; delayed or
unsuccessful product development efforts; potential product
recalls; working capital management; availability and pricing of
raw materials and supplies; potential covenant breaches under the
Company’s credit facilities, as well as other risks described from
time to time under "Risk Factors" in the Company's Annual Report on
Form 10-K and its Quarterly Reports on Form 10-Q (available at
www.sec.gov). Consequently, all forward-looking statements made
herein are qualified by these cautionary statements and there can
be no assurance that the actual results or developments anticipated
by the Company will be realized.
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version on businesswire.com: https://www.businesswire.com/news/home/20210201005201/en/
Reed Anderson ICR 646-277-1260 reed.anderson@icrinc.com
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