It is estimated that this business will generate incremental profitable revenues of approximately $5.0 million to $7.0 million in the first year and continue to grow in following years, as the products are further developed and incremental supply becomes available.
As per the terms of the agreements, SGOI has entered into arrangements with a number of strategic organic suppliers and processors, primarily in Central America, a relatively new but fast developing and growing area for the group, as well as relationships in other key growing regions, to develop supply sources for organic broccoli, green beans, edamame, asparagus and other vegetables and fruits. In addition, SGOI has assumed a number of existing customer contracts and relationships in North America for supply of organic private label and branded frozen vegetable products and expects to grow these relationships as supply and processing sources are expanded.
Joseph Stern, president of SunOpta Global Organic Ingredients, commented, "These agreements allow SGOI to act upon a key strategic initiative by not only diversifying its supply source for organic IQF vegetables and fruits, but also allowing the group to get much closer to the farm gate in a rapidly developing and reputable region for the procurement of commodities which are in global short supply."
Steve Bromley, president and chief executive officer of SunOpta Inc., commented, "This transaction further expands SunOpta's global organic supply capabilities and also expands the company's supply of branded and private label organic food products, both of which are key to our continued strategic growth plans. We intend to leverage the new customer and supply relationships in order to expand supply of various organic food products processed at existing SunOpta operations and also leverage SunOpta's extensive global expertise to bring a number of these products to markets serviced by Tradin Organics, a recent SunOpta acquisition."
From the September 2, 2008, Prepared Foods e-Flash