TORONTO, ONTARIO, CANADA — SunOpta Inc., a processor and marketer of ingredients and finished products targeting the organic and non-GMO/non-bioengineered food and beverage categories, continues to move forward with its four pillar value creation plan to improve the company’s portfolio optimization, operational excellence, go-to-market effectiveness and process sustainability.
"Significant progress has been made identifying the immediate strategic actions that support our Value Creation Plan," said David Colo, president and chief executive officer, during a call with analysts on March 1. "We have worked diligently evaluating all aspects of the business, defining initial actions and building the team and processes to execute our strategic plan to drive long-term shareholder value. As we implement the four pillars of our strategic plan, we will refine our product portfolio, improve execution, broaden our sales effort and build a sustainable platform for profitable growth. We believe SunOpta is well positioned to benefit from the growing trend for healthier foods and we are building the platform for long-term achievement of our strategic goals and increased returns for shareholders."
SunOpta is currently targeting implementation of $30 million of productivity driven annualized adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) enhancements and $20 million of working capital efficiencies to be implemented over the coming 12 to 18 months. In the near term, the company expects these benefits to be offset by structural investments the company is making in the areas of quality, sales, marketing, operations and engineering resources. Additionally, during 2017, the company anticipates incurring non-structural third-party consulting support, severance, and recruiting costs. The plan also calls for increased investment in capital upgrades at several manufacturing facilities to enhance food safety and manufacturing efficiencies.
SunOpta has exited some businesses or product lines as part of its portfolio optimization segment of the four pillar plan it set out in October 2016.
“We are exiting some soy and sunflower varieties, as well as frozen edamame, and took some reserves during the fourth quarter as a result,” Colo said. “We are also exiting a non-vegetable brokerage business and refocusing the sales teams’ efforts on our core portfolio. We have also launched a global organic ingredients portfolio strategy review that we are very excited about, as there are several large categories for us to invest in and grow the ingredient business, including new geographies, new process, and new processing capabilities.”
Another focus SunOpta has zeroed in on is savings opportunities in manufacturing.
“Additionally, we are utilizing third-party support to help us identify and implement cost savings in manufacturing, procurement and logistics,” Colo said. “We are going plant by plant evaluating our asset, processes and systems. First we are standardizing our processes across all of our facilities, rolling out the SunOpta plant management system, a standardized set of operating procedures, KPIs, and continuous improvement methodologies that will provide improved consistency and productivity performance across our manufacturing network.”
In 2016, SunOpta sustained a loss of $51.188 million compared to a loss of $22.471 million in 2015. Revenue for the year was $1.346 billion, down slightly from 2015 sales of $1.145 billion.
“Through our value creation plan, we are taking aggressive action to improve our operating performance and deliver improved results in 2017 and beyond,” Colo said.