Vegalab, Inc. acquires 260,000-square foot packing house for $4.25 million
By Reggie Ellis @Reggie_SGN
LINDSAY – An international crop protection company is rapidly expanding its presence in the San Joaquin Valley after its most recent move to acquire a packing house in Lindsay.
On Nov. 15, Vegalab, Inc. announced its purchase of the Suntreat packing house, 391 Oxford Ave. in Lindsay, for $4.25 million. A portion of the purchase price will be paid in a one-year lease through Nov. 1, 2019. Situated on 9.4 acres, the site encompasses both sides of Oxford Avenue and stretches several blocks from Tulare Road to Hermosa Street. The facility consists of over 260,000 square feet of working space, including three packing lines, approximately 32,000 square feet of cold storage, 12 degreening rooms, and a six-bay shipping area. The facility increases Vegalab’s overall fruit processing capacity to over $150 million annually. Current capacity at the facility is approximately 200 bins per hour.
“While touring the plant, we recognized how well-designed it is to seamlessly combine highly efficient fruit processing with the ability to rapidly ship product to our domestic and international customers,” David Selakovic, CEO of Vegalab, said. “We intend to continue to build out our infrastructure and integrate our properties while efficiently increasing the company’s annual sales.”
Selakovic said the Lindsay packing house began operations this week under Vegalab and is employing about 48 people. He projected that Vegalab would nearly double its workforce to 90 employees within the next six months.
Vegalab, which was only established internationally 10 years ago, has been operating in the U.S. out of Nevada for the past seven years and is headquartered in Florida. The company is the exclusive distributor in North and South America for its line of all-natural, biologically derived pesticides, fertilizers, and specialty agricultural products.
The company operates in two segments of the food industry. The agronomy business involves the manufacture and distribution of all-natural crop protection, crop health, and soil enhancement products; the packing business involves the operation of citrus packing facilities.
Vegalab, which trades on the OTCQB market under the ticker symbol VEGL, recently announced a second quarter revenue of $4.1 million, a 2,370% year increase from the same period last year of $166,000. Selakovic said the citrus packing portion of Vegalab’s business has grown so rapidly it now accounts for half of its multi-million dollar business.
Just in the last year, Vegalab has acquired two packing houses and a distribution warehouse in the Valley where a significant portion of its pesticide and fertilizer customers are located. On Sept. 12, Vegalab closed escrow on a $250 million facility in Merced, Calif. The property, known as Tuttle Creek Dock, consists of approximately 27.33 acres of land, a 18,750 square foot transit warehouse and it sits on the main BNSF railway line. Vegalab will continue to use the transit warehouse, and introduce shipping services to its existing service portfolio. The company will leverage the strategic location of the property, which is surrounded by large agricultural enterprises, which could also benefit from Vegalab’s line of all-natural products.
“We recognized the Tuttle Creek Dock property as an opportunity to rapidly expand our footprint in the San Joaquin Valley, which produces the majority of the United States’ agricultural production that comes from California,” Selakovic said in a message to investors in October. “With this strategic property, we can use our increased presence and contact with growers needing shipping services to further promote the Vegalab brand and increase our customer base for our agrochemical products, right in the middle of California’s most productive agricultural properties.”
In October 2017, Vegalab purchased M&G Packing, 35586 Road 180 in Visalia, for $850,000. The 30,000 square foot building did $8.6 million in fruit sales during the 2016-17 fiscal year. Selakovic said Vegalab worked to expand the capacity of the Visalia facility by investing over $150,000 to nearly double its cold storage space to 22,000 box capacity with the addition of a third cold storage room and additional racks for storage.
“With the current capacity at our existing Vegalab Produce facility unable to meet the demand from our domestic and international buyers for premium quality, and premium priced citrus, management has been systematically evaluating packing facilities to add to our portfolio,” Selakovic said. “The Lindsay, California facility is major acquisition in an ideal location. Being in California’s San Joaquin Valley citrus belt, where Vegalab recently acquired the Tuttle Cross Dock and Warehouse, the property is centrally positioned in one of the best fruit growing ecosystems in the United States.”
It’s uncertain what the lease means for Suntreat. Portland, Ore.-based Agricultural Capital Management (ACM) acquired Suntreat Packing, TreeSource and Griffith Farms in November 2015. In August 2016, the original 50,000 square foot packing shed burned down. About 40 firefighters fought the three-alarm fire with nine engines and two ladder trucks responding from Lindsay Department of Public Safety, Tulare County Fire Department, Cal Fire, as well as municipal fire departments from Porterville, Woodlake, Tulare, Farmersville and Visalia. The fire burned the 70-year-old building for nearly a week prompting responses from Tulare County Environmental Health and the Valley Air District. Following the fire, Suntreat moved most of its packing operation to Legacy Packing and Cold Storage in Dinuba. ACM’s central valley operations are run out of the Dinuba facility. Calls to Suntreat’s Dinuba sales and marketing office were not returned as of press time.