7 July 2008 - US bakery firm Tasty Baking Company is in the construction phase of a new state-of-the-art production facility, which is expected to come online in 2010. The 25 acre bakery site will be located in Philadelphia, Pennsylvania.
The 345,000 square foot manufacturing plant will include production, warehousing and distribution.
In a presentation given at a conference in New York City last week, Paul D. Ridder, Tasty Baking’s CFO, announced that the construction of the plant remains on time and within budget.
The operating and capital investment in the new plant is estimated at USD 75 million. However, Ridder says that once the facility is operational, he expects annual pre-tax cash savings of USD 13-15 million.
In May, Tasty Baking Company reported net sales of USD 42.8 million for its first quarter ended March 29, 2008 - a 3.4% drop from the USD 44.3 million reported a year ago.
At the same time, unit volumes declined 4.3% in the Q1 2008. Tasty Baking explains the drop in output by the shift in the seasonal impact of the Easter holiday from the second quarter of 2007 to the first quarter of 2008. Meanwhile, the company reported a net loss of USD 1 million in Q1 2008 compared to net income of USD 0.9 million in Q1 2007.
At the time, Tasty Baking CEO Charles Pizzi commented: “In the first quarter of 2008, we continued to feel the impact of industry-wide commodity increases as the cost of ingredients and packaging rose by USD 2 million dollars compared to the same period a year ago. During these times we are committed to protecting profits through proper risk management, cost containment, and product pricing actions.”
To help minimise raw material costs, Ridder added that the firm is entering long-term supply arrangements for key ingredients, such as sugar, whenever possible.
Also, in Q1, he added that Tasty Baking raised its list prices on Family Pack and Single Serve cake. The company will also announce other list price increases in the second quarter.
Established in 1914, Tasty Baking Company is headquartered in Philadelphia, Pennsylvania, and is a leading US baker for snack cakes, pies, cookies, and doughnuts. The company currently has two manufacturing facilities in Philadelphia and Oxford, Pennsylvania. Originally selling its products in the Philadelphia area, Tasty Baking now distributes to several states on the East Coast.