SunOpta has had a business relationship with Colorado Mills for a number of years, and in 2006 financed an expansion of existing facilities to increase organic oil seed crushing capacity to meet SunOpta's growing organic oil requirements. This investment has proven successful and has led to the establishment of this venture. Once in production, the joint venture will refine existing crude oil for both Colorado Mills and SunOpta and provide cost efficiencies and increased capacity to service fast growing markets.
The venture will allow SunOpta to continue to cost effectively expand its rapidly growing healthy organic and natural vegetable oils business, and in doing so, meet growing consumer demand for these products. SunOpta began in the healthy oils business approximately seven years ago, and has built this business using a series of third party processors. As volumes have grown, it has become increasingly difficult to cost effectively manage production through third parties, thus driving the opportunity to establish internally controlled operations. As part of the joint venture agreement, SunOpta will market the majority of the refined oil from the venture and expects to generate incremental revenues of approximately $10 million.
Allan Routh, President of the SunOpta Grains and Foods Group, commented, "The benefit of consuming healthy natural and organic oils and avoiding oils containing transfats has generated tremendous demand for our vertically integrated oil products. Joining forces with Colorado Mills to operate this joint venture will position SunOpta to continue to meet increased demand and cost-effectively grow our healthy oils business."