Sun-Rype

Sun-Rype Products Ltd.
Private
Industry Food and beverage
Founded May 13, 1946
Founder BC Fruit Growers Association
Headquarters 1165 Ethel Street
Kelowna, British Columbia
V1Y 2W4
Area served
 Canada and United States
Products Juice, Fruit snacks, Snacks
Revenue Increase$135.1 million CAD (2007)[1]
Increase$4.6 million CAD (2007)[1]
Number of employees
 395 (2006)[2]
Parent The Jim Pattison Group
Website sunrype.com

Sun-Rype Products Ltd. is a Western Canadian fruit-based food and beverage manufacturer.[2] Since its foundation in 1946, Sun-Rype has been producing juices and fruit snacks based in Kelowna, British Columbia, in the heart of the Okanagan.

In 2003, Sun-Rype was named as the 9th fastest growing company in British Columbia by The Vancouver Sun.[3]

History

Incorporated on May 13, 1946, Sun-Rype was founded as BC Fruit Processing Ltd.[4][5] This organization was founded by the BC Fruit Growers Association as a profitable alternative to use their process-grade apples in production rather than throwing them out.[6] On April 2, 1959, after 13 years, BC Fruit Processing Ltd. changed its name to Sun-Rype Products Ltd.[7]

In 1963, Sun-Rype teamed up with the Fraser Valley Milk Producers Association to distribute juice cartons on Vancouver milk routes. In 1979, it became the first juice manufacturing company in Canada to provide tetra packaging for its 250 ml and 1 L juice packs. Also, in 1992, it developed the 6 L bag in a box package.[6]

In 1996, Sun-Rype celebrated its 50th year in business. In recognition of this milestone, mayor Jim Stuart of the City of Kelowna honored Sun-Rype by declaring May 13, 1996 "Sun-Rype Day".[6]

Failed expansion to China

In November 1994, Sun-Rype announced plans to expand to China. The company signed a memorandum of understanding with Shanghai Jinqiao EPZ Scientific Development Co. Ltd. to produce and sell its juices in the Asian country. With a plant located in the Jinqiao Export Processing Zone in Pudong, Sun-Rype invested 65% of the $13 million project cost and anticipated to be selling its juices by the end of 1995.[8]

This expansion plan almost immediately started to falter, and in 1997, Sun-Rype was forced to create a new joint venture with Lion Group, a Malaysian conglomerate. With this deal in place, Sun-Rype received land, equipment, and future working capital, while Lion Group took over ownership of the Asian subsidiary.[9]

By 1998, after net losses of $5.8 million in 1997, the venture was not proving to be profitable, so in March of that same year, Sun-Rype decided to pull out of the Chinese market.[10][11] The company absorbed $4.4 million in losses.[12]

Hostile takeover attempt

In July 1996, Clearly Canadian Beverage Corporation initiated a $40 million hostile takeover bid of Sun-Rype.[13] The reasons behind this attempt were to immediately double Clearly Canadian's revenues and give it use of Sun-Rype's bottling plant, thus centralizing its production facilities.[14] In order to initiate the takeover, Clearly Canadian began buying as many shares as possible from local apple growers who had been issued the shares over the last five decades in return for the process-grade apples used in production by Sun-Rype. At the time of the takeover attempt, Sun-Rype was still a co-operative organization, not a public company, so there were few ways for shareholders to sell their shares.[15]

Shareholders were given the option of either one Clearly Canadian share per Sun-Rype share, or $1.61 and a half of a Clearly Canadian share per Sun-Rype share. This offer finally gave true financial value to the shares, inclining many shareholders to sell them. Both Sun-Rype's board of directors and the BC Fruit Growers Association argued against the takeover attempt to shareholders, and on July 18, the board of directors offered an 18–page document detailing why shareholders should refrain from selling.[16] On July 24, just days later, Clearly Canadian also sent out a document describing to shareholders why they should sell their shares. Both of these documents contained invalid and misleading information about each company, such as share values and purchase options to shareholders, so on July 31, the British Columbia Securities Commission issued an order for both companies to correct the statements.[17]

With the bid offer expiry date of August 7 approaching, Clearly Canadian decided to extend its offer expiration date to August 19. It claimed it was doing this to give shareholders more time to decide whether or not to sell their shares. This extension caused further rifts between the two companies, with Sun-Rype claiming reason for the extension, while Clearly Canadian stayed focused on acquiring as many shares as possible.[18] With the final bid deadline fast approaching, Clearly Canadian used many tactics in an attempt to gain more shares, including sending out circulars, hosting public receptions, and talking to community press.[14] In the end however, Sun-Rype, which spent $741,000 fighting the takeover, was able to prevail over Clearly Canadian, losing only 15.8% of its shares to the beverage corporation.[19][20]

Initial public offering

The hostile takeover attempt by Clearly Canadian proved how unsatisfied shareholders were with Sun-Rype management styles and caused differences within the company, apple growing community, and investors.[15] As a result, Sun-Rype finally went public on the Toronto Stock Exchange on November 12, 1996, with 2.35 million shares opening at $2.75 a share.[21][22] It used the profits from the offering to pay off a $6.3 million bank debt and help fund its new Chinese operation.[23]

From public corporation to private

In September 2013, Sun-Rype Products Ltd. became privately owned by the Jim Pattison Group.

References

  1. 1 2 Sun-Rype Products Ltd. (February 28, 2008). "Annual report for the year ended December 31, 2007" (PDF). (553 KiB). Retrieved on 2008-03-05
  2. 1 2 Sun-Rype Products Ltd. (February 28, 2007). "Annual Information Form for the Year Ended December 31, 2006" (PDF). (204 KiB). Retrieved on 2007-03-30
  3. ↑ "The Top 100". The Vancouver Sun. October 9, 2003.
  4. ↑ "Corporate Profile". Sun-Rype Products Ltd. Retrieved 2007-03-30.
  5. ↑ "Our History". Sun-Rype Products Ltd. Retrieved 2007-03-30.
  6. 1 2 3 Attard, Yvonne (September 1996). "Fifty golden years: Sun-Rype continues to bear fruit". Food in Canada. 56 (7): 50.
  7. ↑ "FAQ". Sun-Rype Products Ltd. Retrieved 2007-04-02.
  8. ↑ "New Canadian business initiatives in China" (Press release). Canada Trade Missions. November 10, 1994. Retrieved 2007-04-02.
  9. ↑ Damsell, Keith (August 29, 1997). "Investors left flat by beverage saga". Financial Post.
  10. ↑ Sun-Rype Products Ltd. (2000). "Annual Report 1999" (PDF). (1.51 MiB). Retrieved on 2007 April 2
  11. ↑ Lazarus, Eve (April 13, 1998). "Sun-Rype rethinks its expansion plans". Marketing Magazine. 103 (14): 3.
  12. ↑ "BC juice manufacturer drops plan to sell in China". Canadian Press. October 20, 1998.
  13. ↑ Connolly, Kathleen (July 17, 1996). "Bid made for control of Sun-Rype". Oliver Chronicle. Archived from the original on September 29, 2007. Retrieved 2007-03-31.
  14. 1 2 McCullough, Michael (December 1996). "Just add hype". Canadian Business. 69 (15): 130–135.
  15. 1 2 MacNaull, Steve (October 26, 2005). "When life hands you apples, make juice". The Globe and Mail. Retrieved 2007-03-30.
  16. ↑ Damsell, Keith (July 27–29, 1996). "Doug Mason can see clearly now". Financial Post. 90 (30): 12.
  17. ↑ "Securities Commission Issues Decision on Clearly Canadian and Sun-Rype" (Press release). British Columbia Securities Commission. July 31, 1996. Retrieved 2007-03-31.
  18. ↑ "Deadline stretched for Sun-Rype buy-out". Oliver Chronicle. August 8, 1996. Archived from the original on September 29, 2007. Retrieved 2007-03-31.
  19. ↑ "A hostile takeover bid leaves Sun-Rype a bit sour financially". The Vancouver Sun. November 30, 1996.
  20. ↑ Nutt, Rod (August 23, 1996). "Clearly Canadian takeover bid falls flat". The Vancouver Sun.
  21. ↑ "Economic Profile". Economic Development Commission. Retrieved 2007-04-02.
  22. ↑ "Investment news". The Globe and Mail. November 5, 1996.
  23. ↑ "Sun-Rype files prospectus for IPO". Financial Post. 9 (119): 7. August 29, 1996.
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