The company currently produces the majority of its products from 15 production lines in a six-story factory built in 1922. The capital investment for the new baking equipment and related expenditures are expected to add up to $75 million.
Specifically, the company entered into a 26-year lease with Liberty Property Trust for a 345,500 sq.-ft. building on 25 acres, which will include the production facility, a warehouse and a distribution center. The building will be designed and built by the Liberty Property/Synterra Limited Partnership. Fluor Corporation will assist with the engineering and installation logistics of the new bakery. Site preparation has begun, with construction scheduled to start in late 2008, with a scheduled completion in late 2009
The new one-story facility with highly automated baking equipment will allow the company to reduce its production lines from 15 to 7, while providing capacity for future sales growth. Tasty anticipates that there will be a workforce reduction of approximately 215 positions related to the transition to this new facility. Over the next three years, the company will reportedly manage attrition and contract labor in an effort to minimize the direct impact to its employees. The synergistic impact of the new design, modern equipment and updated distribution center will help drive the return on this project.
The company's new 35,000 sq.-ft. corporate headquarters will be developed as a high-performance, LEED-certified (Leadership in Energy and Environmental Design) "green" facility. It will employ energy efficient HVAC, water conservation, recycled building materials, and day-light harvesting, among other environmentally efficient features.
"When completed, we anticipate annual pre-tax cash savings of approximately $13 to $15 million, net of the facility leases and before debt service," said David Marberger, executive v.p. and CFO. "The annual cash savings realized will allow us to make meaningful investments to grow the sales and profits of the business."
Founded in 1914, Tasty Baking Company is one of the country's leading bakers of snack cakes, pies, cookies and donuts with manufacturing facilities in Philadelphia and Oxford, Pa.
