Staten Island, NY-based Coffee Holding Co. Inc. has purchased the building and surrounding property in La Junta, CO, where it has maintained its largest roasting operation since 2005.
The purchase price of the 50,000-sq.ft. facility and adjoining 6.278 acres of land was $900,000, which was $70,000 below the recent appraised value of the property, CHC reported.
“We believe this is a great opportunity to improve the value and operational efficiency of our company,” said CHC president and chief executive Andrew Gordon
“At a time when the company is basically debt free, to now own our largest and most efficient operating facility, we believe the company will greatly benefit in the near and long term in several ways," Gordon continued.
"First, by eliminating our monthly rental to the city, we will save over $100,000 annually, or $0.02 per share," he explained. "We will also recognize the depreciation on our balance sheet for this asset. More importantly, we will now be able to undergo an expansion at the facility which we expect will enable us to conduct our roasting operations more efficiently."
The facility expansion and upgrade is expected begin at the end of the year. When completed, CDC will be able to consolidate roasting operations in La Junta. The consolidation is predicted to bring about annualized cost savings of $2 million.
Coffee Holding Co. has been a family-operated business for three generations. Its private label and branded coffee products are sold throughout the United States, Canada and abroad.