-- Investment Further Demonstrates Company’s Green Initiative and Plan for Enhanced Vertical Integration to Accelerate Growth --
CHINO, Calif., April 07, 2022 (GLOBE NEWSWIRE) -- Karat Packaging Inc. (NASDAQ: KRT) (Karat), a specialty distributor and manufacturer of environmentally friendly, disposable foodservice products and related items, today announced it has entered a definitive joint venture agreement with Happiness Moon, Co. Ltd (Happiness Moon) to establish a new corporation, Green Earth Technology (Green Earth), to build a new 180,000 square-foot factory in Taiwan.
The new facility will have state-of-the-art robotic automation to manufacture compostable foodservice products from bagasse, a derivative of sugar cane pulp, which is a fast-growing source of 100% compostable foodservice products. Happiness Moon is one of the leading manufacturers of disposable foodservice products and machinery in Taiwan, with a global blue chip customer base.
Karat will hold a 49 percent interest in Green Earth, and its initial investment is approximately $6 million. Manufacturing is anticipated to start in the second half of 2022, using proven machinery and technologies developed by Happiness Moon. The new plant is expected to produce approximately 7,560 tons of products in 2023, or approximately 648 containers of take-out boxes, plates, bowls, tableware, and other bagasse products. Approximately one half of the production will be earmarked for Karat’s customers, with the remainder for other customers in Asia and Europe.
“Our investment demonstrates Karat’s commitment and leadership position in providing eco-friendly disposable foodservice products,” said Alan Yu, Chief Executive Officer. “Most bagasse products in the United States are currently imported from China. The joint venture will enhance Karat’s vertical integration in its supply chain and accelerate growth and margin expansion.
“Our objective in the next several years is to become the leading manufacturer of bagasse foodservice products for the U.S. market. After thoroughly assessing the technology and robotic capability in Taiwan, which we believe will enhance efficiencies and productivity, we plan to bring the proprietary manufacturing processes to the U.S. and build a first-of-its-kind bagasse production plant.
“Expanding the use of environmentally friendly, compostable products, which have a lower carbon footprint, represents a critical step to help businesses and consumers transition toward sustainable living. Karat’s unique complementary operating platform of supplier network and manufacturing enables us to provide customers broader product offerings and customization, with shorter lead times,” Mr. Yu added.
About Karat Packaging Inc.
Karat Packaging Inc. is a specialty distributor and manufacturer of a wide range of environmentally friendly, disposable foodservice products and related items, primarily used by national and regional restaurants and in foodservice settings throughout the United States. Its products include food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products. The company’s eco-friendly Karat Earth® line offers quality, sustainably focused products that are made from renewable resources. Karat also offers customized solutions, including new product development and design, printing, and logistics services. To learn more about Karat, please visit the company’s website at www.karatpackaging.com.
Caution Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including, but not limited to, completion of the new manufacturing plant in Taiwan, production capacity and building a U.S. plant, are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company’s most recent Annual Report on Form 10-K for the year ended December 31, 2021 and our other public filings made with the Securities and Exchange Commission (SEC) (File No. 001-40336). Copies are available on the SEC’s website at www.sec.gov. Karat undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Investor Relations and Media Contacts:
PondelWilkinson Inc.
Judy Lin Sfetcu/Roger Pondel
310-279-5980
karat@pondel.com
