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.
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