Green Mountain to boost Montreal operations with as much as $50M investment

[Habfanman]

Nicolas Van Praet, Financial Post · Jun. 6, 2013 | Last Updated: Jun. 6, 2013 2:23 PM ET

 

MONTREAL • Green Mountain Coffee Roasters Inc. is revamping its Canadian manufacturing operations in Montreal as investors savour a tripling in the company’s shares over the past year.

 

The Waterbury, Vt.-based company, which bought Quebec coffee chain Van Houtte in 2010, will announce Friday a $40-million to $50-million investment to modernize its plant in Montreal’s Saint Michel neighbourhood with new packaging equipment, two sources said. More than 100 new jobs will be created in the move.

 

It’s all part of a larger effort by Green Mountain Canada President Sylvain Toutant to fortify and grow the company’s presence in Montreal since the $915-million takeover three years ago. Building on initial moves to purchase property around the company’s Van Houtte coffee facility in the city’s north end and to occupy a new country head office, Mr. Toutant is now expanding the Montreal manufacturing operations.

 

“This is really a great piece of news for a neighbourhood that badly needs it,” said Frantz Benjamin, the municipal councillor representing the district, adding the company’s modernization is only the first phase of what could be a larger economic development project for the neighbourhood.

 

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“In the medium term, we’d really like to develop an entire Quartier du Café (Coffee District) in the area,” anchored around Green Mountain, he said. Montreal has other geographical clusters of business activity, but this one in Saint Michel’s industrial district would be among the more remote.

 

The coffee maker sought financial support from the Quebec government for the manufacturing modernization, which it is believed to have won. The funds would be used to add a production line in Saint Michel and diversify commercial activities, the company said in a filing with Quebec’s lobbyist registry.

 

Shares of Green Mountain rose 3% to $74.68 in Nasdaq trading Thursday. They’ve more than tripled over the past year.

 

In December, Mr. Toutant articulated a three-year plan for Green Mountain’s Montreal site to add 50,000 square feet of production space, boost the payroll by 150 workers to 1,000, and refurbish the roasting plant. The site currently encompases the head office, a roasting factory and two distribution warehouses.

 

Green Mountain dominates the single-serve coffee market in the United States with its Keurig-brand coffee makers and K-Cup pods, making money from most of the coffee sold for those machines. The company lost more than two-thirds of its market value during the year ending last October, but has since staged a remarkable recovery, proving that despite the expiry of its K-Cup design patents it can still generate earnings growth.

 

Green Mountain’s product innovation will be an important performance driver in the years ahead, Imperial Capital analyst Mitchell Pinheiro said in a research note Thursday, initiating coverage on the shares with an outperform rating and $95 price target.

 

“We believe the company’s potential on the cold beverage side of the at-home beverage category could create an opportunity that is as large, if not larger, than its current coffee, tea and hot cocoa segment,” Mr. Pinheiro said, forecasting earnings per share growth of 15-25% over the next three years.

 

http://www.nationalpost.com/Green+Mountain+boost+Montreal+operations+with+much+investment/8490304/story.html

[LindbergMTL]

J'ai déjà tourné un reportage dans leur usine de St-Michel. Il y a des gouteurs de café qui passent leur journée à gouter du café pour s'assurer des bons dosages et mélanges. Les bruleurs de café sont gigantesques mais permettent quand même une très grande précision de cuissson des fèves comparativement à d'autres brûleries.