Coffee Holding Company has announced the purchase of its largest roasting facility in the United States from the City of La Junta for US$900,000. The American roaster was previously renting the site.
Located in Colorado, the 4645-square-metre facility and joining 2.54 hectares of land was bought for US$70,000 below the property’s recent value appraisal given.
Andrew Gordon, President and CEO of Coffee Holding Company says, “We believe this is a great opportunity to improve the value and operational efficiency of our company.
“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 believes by removing the monthly rental payment to the City of La Junta, Coffee Holding will save over US$100,000 annually, or US$0.02 cents per share. He says the company recognises the depreciation of the building in its balance sheets.
“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,” says Gordon.
Gordon hopes to begin facility expansion by late 2021, allowing Coffee Holdings time to consolidate their operations in La Junta, therefore removing dual costs.
“Eventually, we believe the annualised cost savings will be approximately US$2 million once operations have been fully consolidated in La Junta,” Gordon says.
“We expect the company will experience increased freight costs associated with shipping product back to the east coast, but we anticipate the overall cost savings will vastly outstrip any potential increases.”
Coffee Holding Company is a wholesale coffee roaster and dealer in the United States which has been family-owned and operated for three generations.
