Food Processing - April 2008 - (Page 26)

Once again, the biggest gainer, in dollar terms, is PepsiCo, budgeting $300 million more for CapEx than it spent in 2007 (it, too, underspent, by $200 million). Yet, in percentage terms, the company has trimmed its rate of spending growth by more than 10 percent over last year’s number. Last year’s $2.4 billion was used to install an SAP enterprise resource planning system at the company’s Quaker, Tropicana and Gatorade divisions, among other things. Does all this growth make sense in what looks to be a difficult economic year? “Part of the need for capital spending is to deal with margin compression,” says Dennis Krause, senior vice president and industry leader in food, beverage and agribusiness for GE Corporate Lending (www.gelending.com), Norwalk, Conn. “Everyone knows what’s happened to corn. Wheat prices are soaring. The only way to preserve earnings is by getting more efficient.” In times like these, big, well capitalized companies will spend; small companies will defer capital expenditures. Krause, who was chief financial officer at Triumph Foods, says it will be interesting to see if the bigger companies can then steal market share from third- and fourth-tier brands, which no longer have a price edge. Greenfield growth While there are several new projects planned for 2008, none comes close to the whopping $359 million factory and distribution center that Nestle Beverages began in 2007 (and is still under construction in Anderson, Ind.). The biggest project this year is less than half that size. John B. Sanfilippo & Son Inc. opened a new $117 million, 1.1 million-sq.-ft. headquarters, manufacturing and distribution center in Elgin, just west of Chicago. While it falls in Sanfilippo’s FY2008, the move-in occurred late last year. The only other $100 million project is the Really Cool Foods production and distribution facility in Cambridge City, Ind. The company plans to build and equip the complex in a number of stages. The first facility to be built on the site will be a new, 77,000-sq.-ft. USDA-certified organic commissary and distribution center. The company plans to build other modules and will begin hiring production workers this year. Hormel Foods soon will break ground on a new production facility in Dubuque, Iowa. Total cost of the project is estimated at $89 million. “Consumer demand for shelf-stable microwave meals is exploding,” says Jeffrey Ettinger, chairman, president and CEO. Big Spenders for 2008 Company Pepsico Coca-Cola Kraft Anheuser-Busch General Mills Kellogg ConAgra Tyson Campbell Soup Molson Coors Hershey Pilgrim’s Pride Smithfield Dean Foods Constellation Brands Hormel Flower Foods Saputo J.M. Smucker Ralcorp DelMonte Lance TOTAL: All figures are in millions of dollars M=Midpoint of a range; E=Estimated; C=Canadian dollars; NA=Not Available * One company did not report 2007 budgeted amount 26 • FOOD PROCESSING APRIl 2008 WWW.FOODPROCESSING.COM 2008 Budget $2,700 1,650M 1,200 975 575 471E 450 450M 400 315 313M 295M 288 250 165 150 97M 84C 75 63M 54 47 $11,067 Change from ‘07 13% 0 0 12 25 0 6 58 20 -36 66 72 -40 4 -15 19 10 16 32 11 -44 18 7.1% 2007 Actual $2,400 1,648 1,200 870 460 472 425 285 334 428 189 172 478 241 193 126 88 72C 57 57 95 40 $10,330 2007 Budgeted $2,600 1,500 1,200 900 425 450E 450 400 339M 320 275M 150M 454 250 155 145 64 NA 70M 48M 60 48 $10,303* 2006 Actual $2,100 1,407 1,200 813 360 453 263 531 309 446 183 144 382 237 133 142 62 69C 63 58 69 47 $9,471 http://WWW.FOODPROCESSING.COM

Table of Contents Feed for the Digital Edition of Food Processing - April 2008

Food Processing - April 2008 Contents Editor's Plate NewsBites The Trends Rollout Food Biz Kids Consumer Taste Test - Indulgent, Superpremium Chocolate...at 3 Calories a Pop Cover Story - Annual Capital Spending Report - To Build or Not to Build? Ingredients - Trendy Fruits, Nuts and Vegetables Plant Operations - iPlant: Assessing the State of Automation Plant Operations - Your Sanitation Can Be Greener Packaging - For Which Oven? MRO Q&A New Supplier Products Toops Scoops

Food Processing - April 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.