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Flowers bakery expands to cope with higher demand

By Lorraine Heller , 24-Oct-2005

US bakery Flowers Foods last week announced that it is expanding its production facilities in order to cope with growing demand for its products.

The company, which claims to be one of the nation's leading producers of packaged bakery goods for both retail and foodservice, said it has completed the purchase of a 115,200 square-foot plant in Newton, North Carolina.

"With the growing demand for our baked foods in our existing market and in new territory we're gaining through expansion, we need more production capacity," said the company's chief executive officer George Deese.

"Newton is strategically located in our market territory to help relieve production pressure. Another benefit is that the facility we acquired is well suited to house a bakery with long, highly efficient production lines," he added.

Although the terms of the transaction itself were not disclosed, the company said it planned to invest around $40m in the bakery over the next three years.

Renovations at the plant are expected to begin this month. The bakery, which is to make fresh breads and buns for the Piedmont and mid-Atlantic market, will begin production in mid-2006, the company said.

The company's main brands include Nature's Own, Cobblestone Mill and Sunbeam.

Flowers Baking, a subsidiary of Flowers Foods, also announced last week that it will be expanding its Villa Rica, Georgia, bakery to house a new, high-speed bread line.

The 70,000-square-foot expansion began in September and is expected to be completed by spring 2006.

"The new bread line, which will produce Nature's Own and Cobblestone Mill breads at speeds up to 160 loaves per minute, will provide Flowers Foods with additional capacity to meet the growing demand for its breads in Georgia, Alabama, Tennessee, and the mid-Atlantic states," the company said in a statement.

Whereas Flowers Foods appears to be holding its own in an industry squeezed by higher costs, other bakery companies in the US are not faring so well.

Interstate Bakeries Corporation (IBC), which recently announced it is to close its seventh bakery since filing for bankruptcy last September, partly blamed its financial troubles on higher ingredients and energy prices. By the time it had filed for bankruptcy, IBC had run up $1.3 billion (more than €1 million) worth of debts.

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