Specialty packaging technology drives Landec profit surge

By Rory Harrington

- Last updated on GMT

Related tags Revenue Income Apio

Landec Corp said rising demand for its speciality packaging products was the key driver behind it posting a significant leap in its profits and sales for the second quarter of 2012.

The US-based company announced yesterday that its net income for the three months ending 27 November 2011 soaring by 63% to US$3.3m compared to US$2.1m in the same period last year.

The company describes itself as a materials science company that develops proprietary polymer technologies for agricultural, industrial and biomedical markets.

Landec said Q2 revenues also saw a healthy increase – rising 16% year-on-year to US$81.6m.

The US$11.6m growth in revenue was due to rising demand for the California firm’s food and biomaterials products.

Fruit packaging powers profit rise

More than 50% of this – or US$6m – came from increased sales of Landec’s Apio business. This includes the fresh-cut packaged vegetable unit Apio Cooling and Apio Packaging. A further US$4.6m revenue increase came from growth in exports from the subsidiary.

Landec said its specialty technology combined with a partnership with a large US food supplier, processor and distributor had been instrumental in the improved performance.

The company previously announced that fruit giant Chiquita had decided to renew its licensing and distribution agreement with Apio for an additional five years - maintaining Chiquita’s exclusive right to use its BreatheWay technology to extend shelf life for bananas, avocados and mangos.

Chiquita has also added selective shipping container applications to the agreement and the deal included guaranteed minimum purchases of the BreatheWay membranes for all fields in which the fruit firm has exclusive rights, confirmed Landec.

Gary Steele, Landec chairman and CEO, said: "We had a very good second quarter. Our Apio food business grew revenues and profits in both its value-added business and its export business. The growth for these businesses can be primarily attributed to increased sales volumes and normal weather patterns so far this year.”

Revenues for the first six months of 2012 increased $19.8m to $154.9m - a rise of 15% compared to 2010. Net income for the first six months increased 18% to $5.2m. The increase in year-on-year revenues were thanks to Apio, which saw an $8.8m increase in its value-added business and a $9.5m jump in exports.

Related topics Processing & Packaging

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