ROUGEMONT, QC, Oct. 1, 2024
/CNW/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde" or
the "Corporation") announced today an important capital investment
program aimed at enhancing the competitiveness of its U.S. beverage
manufacturing network.
The program mainly consists in the investment of approximately
US$200.0 million over an estimated
two-year period for the construction of a new beverage
manufacturing facility in New
Jersey, on a site adjacent to the Corporation's existing
plant. Once built, the state-of-the-art facility, extending across
approximately 200,000 square feet, will replace the existing plant
and enable Lassonde to fortify its competitive position in the key
U.S. northeast market by improving operating efficiency and
delivering incremental volume at lower costs through a more
efficient production flow, improved yields, and better logistics.
The investment is expected to be accretive with an internal rate of
return that exceeds the Corporation's cost of capital.
Construction is expected to begin in early 2025 and existing
production activities will be progressively transferred beginning
in 2026. The transition is expected to be completed in 2027,
reaching a full run-rate by the end of that year.
"Lassonde is proud to launch an important investment program to
strengthen its position as one of the leading North American fruit
juice and drink manufacturers," said Vince Timpano, Chief Executive
Officer of Lassonde Industries Inc. "Since entering the U.S.
market, we have methodically expanded our footprint and our
initiatives will support further expansion of both our private
label and branded beverage activities, while improving our
profitability. Over the longer term, this investment program will
offer the potential to add further production capacity and new
capabilities to meet market opportunities."
"Investments will drive efficiency enhancements across our U.S.
operations, while providing flexibility and added capabilities to
meet future growth in demand," Mr. Timpano added. "Our U.S. volume
build-back plan is progressing as anticipated, and this new
facility will offer more capacity over the longer term to better
serve our customers and support our momentum. Through Project
Eagle, which identified and addressed key issues impacting the U.S.
beverage supply chain and manufacturing performance, and the
commissioning of a new single-serve line in North Carolina, our teams have proven their
ability to execute large and complex projects, and we are confident
in their ability to deliver this significant one on time and on
budget."
"The support we have received from Upper Deerfield Township and Cumberland County in New Jersey has been instrumental in making
this new facility a reality," added Amanda
Burns, President, Private Label, Lassonde Pappas and Company Inc. "For several
decades our U.S. business has called Cumberland County home and this investment
further underscores our long-standing commitment to the community
and our belief in its continued growth and prosperity."
Following the recent US$53.0
million investment to expand its single-serve capabilities
in North Carolina, Lassonde also
plans to invest an additional US$20.0
million at this facility to fortify its role as a strategic
production hub. This supplementary investment consists in bringing
in-house certain owned production assets currently deployed at a
co-packer facility. This in-sourcing, expected to be completed in
2025, will allow the Corporation to enhance network efficiency and
reliability by optimizing the utilization of these assets, while
providing more flexibility to meet incremental demand.
Related to the New Jersey
project, certain existing assets will have to be depreciated at an
accelerated rate over a period of ten quarters beginning in the
fourth quarter of 2024. As a result, the Corporation expects its
quarterly depreciation expense to increase by approximately US
$1.5 million during that period.
About Lassonde
Lassonde Industries Inc. is a leader in the food and beverages
industry in North America. The
Corporation develops, manufactures, and markets a wide range of
private label and national brand products, including ready-to-drink
beverages, fruit-based snacks as well as frozen juice concentrates.
It is also a leading producer of cranberry sauces and specialty
food products such as pasta sauces, BBQ sauces, condiments, soups
and fondue broths and sauces. The Corporation also produces,
imports and markets selected wines from several countries of origin
and produces and markets apple cider and cider-based drinks.
The Corporation is active in two market segments:
- Retail sales consist of sales to food retailers and wholesalers
such as supermarket chains, independent grocers, superstores,
warehouse clubs, major pharmacy chains; and
- Food service sales consist of sales to restaurants, hotels,
hospitals, schools, and wholesalers serving these
institutions.
The Corporation operates 19 plants located in Canada and the
United States and produces its superior quality products
through the expertise of over 2,900 full-time equivalent employees.
To learn more, visit www.lassonde.com.
Caution Concerning Forward-Looking Statements
This document contains "forward-looking information" and the
Corporation's oral and written public communications that do not
constitute historical fact may be deemed to be "forward-looking
information" within the meaning of applicable Canadian securities
law. These forward-looking statements include, but are not limited
to, statements on the Corporation's objectives and goals, its
expectations for a new manufacturing facility, the timing and
anticipated cost of construction, the expected rate of return of
the investment, the Corporation's competitive position and the
anticipated improvements in operating efficiency, production flow,
volumes, costs, yields and logistics. Forward-looking statements
are based on current expectations, projections, beliefs, judgments,
and assumptions based on information available at the time the
applicable forward-looking statement was made and considering the
Corporation's experience combined with its perception of historical
trends.
Forward-looking statements are typically identified by words
such as "anticipate", "continue", "estimate", "expect", "may",
"will", "project", "should", "could", "would", "believe", "plan",
"intend", "design", "target", "objective", "strategy", "likely",
"potential", "outlook", "aim", "goal", and similar expressions
suggesting future events or future performance in addition to the
negative forms of these terms or any variations thereof. All
statements other than statements of historical fact included in
this document may constitute a forward-looking statement.
Various factors or assumptions are applied by the Corporation in
elaborating the forward‑looking statements. These factors and
assumptions are based on information currently available to the
Corporation, including information obtained by the Corporation from
third parties. Readers are cautioned that the assumptions
considered by the Corporation to support these forward-looking
statements may prove to be incorrect in whole or in part.
The significant factors that could cause actual results to
differ materially from the conclusions, forecasts or projections
reflected in the forward-looking statements contained herein
include, among other things, risks associated with the following:
deterioration of general macroeconomic conditions, including
international conflicts, which can lead to negative impacts on the
Corporation's suppliers, customers, and operating costs; the
successful deployment of the Corporation's multi-year strategy
(defined in Section 4 - "Multi-Year Strategy" of the Corporation's
MD&A for the second quarter ended June
29, 2024); climate change and disasters causing higher
capital expenditures; the scarcity of labour and the related impact
on the hiring, training, developing, retaining and reliance of
personnel together with their productivity, employment matters,
compliance with employment laws across multiple jurisdictions; the
successful deployment of the Corporation's health and safety
programs in compliance with applicable laws and regulations;
serious injuries or fatalities, which could have a material impact
on the Corporation's business continuity and reputation and lead to
compliance-related costs; failure to maintain the quality and
safety of the Corporation's products, which could result in product
recalls and product liability claims for misbranded, adulterated,
contaminated, or spoiled food products, along with reputational
damage; risks related to fluctuations in interest rates, currency
exchange rates, liquidity and credit and stock price; the
incurrence of restructuring, disposal, or other related charges
together with the recognition of impairment charges on goodwill or
long-lived assets; the sufficiency of insurance coverage; and the
implications and outcome of potential legal actions, litigation or
regulatory proceedings to which the Corporation may be a party. The
Corporation cautions readers that the foregoing list of factors is
not exhaustive.
The assumptions, expectations, and estimates involved in
preparing forward-looking statements and risks and uncertainties
that could cause actual results to differ materially from
forward-looking statements are discussed in the Corporation's
materials filed with the Canadian securities regulatory authorities
from time to time, including information about risk factors that
can be found in Section 19 - "Uncertainties and Principal Risk
Factors" of the Corporation's MD&A for the year ended
December 31, 2023. Readers should
review this section in detail.
All forward-looking statements included herein speak only as of
the date hereof. Unless required by law, the Corporation does not
undertake any obligation to publicly update or revise
forward-looking statements, whether as a result of new information,
future events, or otherwise. All forward-looking statements
contained herein are wholly and expressly qualified by this
cautionary statement.
SOURCE Lassonde Industries Inc.