TORONTO — SunOpta Inc., a natural and organic foods company, has undertaken a process to streamline its operations and organizational structure, addressing underperforming food based operations and targeting improved earnings, predictability and return on assets. As part of the process, the company said it is cutting 6% of its salaried workforce, reducing the number of divisions it operates and restructuring operations, moves that are expected to save about $3 million a year in operating costs.
The changes include the elimination of the former Fruit Group and creation of a new Consumer Products Group, which will focus on non-grains based consumer packaged goods. The Consumer Products Group will be comprised of the Frozen Foods and Healthy Snacks operations, which were part of the former Fruit Group, and the Food Solutions operations, which were formerly part of the International Foods Group. As part of this restructuring the Fruit Ingredient operations of the former Fruit Group have been consolidated with the existing Ingredients Group.
The International Foods Group now will be comprised of the company’s international sourcing and supply operations (Tradin Organic) and the operations of Purity Life Health Products. The Grains and Foods Group will remain unchanged, SunOpta said.
Following the realignment, SunOpta Foods will consist of four operating segments: Grains and Foods; Ingredients; Consumer Products; and International Foods. The company will begin reporting segmented information based on its new operating segments for the quarter ending March 31, 2012.
SunOpta said it expects to incur one-time severance costs of approximately $500,00 before tax as a result of the salary cuts during the first half of fiscal 2012, and will report a primarily non-cash charge of approximately $8.6 million after tax, or 13c per diluted common share, in the company’s results of operations for the fourth quarter of fiscal 2011, reflecting the write-down of intangible and other long-lived assets and certain inventory at our Purity Life Health Products and Frozen Foods operations.
“These decisions and activities are important to our company’s development as a global leader in natural and organic foods,” said Steve Bromley, president and chief executive officer of SunOpta. “We have grown rapidly over the last 10 years and built a solid organization within markets that we feel are poised for long-term growth. We believe there is much more that can be accomplished and this realignment and rationalization is a key step in addressing our company’s true potential, improving our operational performance and positioning SunOpta for continued success.”
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