Capital Expenditures

Investing for Future Growth
After Rich Products restructured its business strategy, the company began reshuffling its production operations and investing upward of $30 million to support its growth initiative to become a $3 billion business by 2008.
Rich’s is spending about $20 million to upgrade production at its Murfreesboro, Tenn., plant, which produces frozen dough, par-baked breads and rolls, muffins and sweet goods. It’s spending another $9 million to expand a similar bakery plant in Ft. Erie, Ont.
In addition to adding capacity to its Fresno, Calif., bakery operation, Rich’s is also investing in its Arlington, Tenn., facility for toppings, icings and other non-dairy products. The company is moving frozen toppings and icings out of its Buffalo, N.Y., plant to its Niles, Ill., plant and its plant in Arlington. The Buffalo plant will still produce other products using high-tech/high-temp technology, in which it invested $10 million in upgrades in 2001.
On the other hand, the company is closing its Winchester, Va., bakery. In 2001, it closed its Appleton, Wis., bakery. Aside from adding capacity, the reorganization of its manufacturing operations is designed to improve productivity, especially in distribution, says Kevin Malchoff, president of Rich’s U.S./Canada Group. To better coordinate production under one department, the company hired Duffy Smith as senior vice president of operations.
Rich Products operates plants in 30 cities worldwide to produce toppings and icings, frozen dough and baked goods, and other specialty items from frozen desserts and bakery mixes to meats, shrimp and entrees. The company has 23 plants in the United States.