FORT MYERS, Fla., Nov. 16, 2017 (GLOBE NEWSWIRE) -- Alico, Inc. (NASDAQ:ALCO) announces the Alico 2.0 Modernization Program. In January 2017, Alico Inc. embarked on an aggressive plan to improve its operational efficiencies and optimize its asset returns. This program, called Alico 2.0, is transforming three legacy businesses (Alico, Orange Co., and Silver Nip) into a single efficient enterprise, Alico Citrus, so we will remain one of the leaders in the U.S. citrus industry. This initiative explored every aspect of Alico’s citrus and ranch operations, including corporate and operational cost structures, grove costs, purchasing and procurement, non-performing and under-performing assets, professional fees, and human resources efficiency.
Alico has been careful to eliminate costs that it believes will not negatively affect citrus production. In fact, we believe that its new management structure and practices will drive enhanced production. Alico 2.0 will take at least two seasons to realize full results. Alico Citrus is reducing total expenses per acre from $3,314/acre in FY16 to $2,164/acre when Alico 2.0 is fully implemented. Overall, the program should reduce the company’s cost to produce a pound solid from $2.14 to $1.56.
Alico Dispersed Water Program
Alico currently has a 10 year contract with the state of Florida to store 94,000 acre feet of water for $127 per acre foot. This Dispersed Water Program continues to make progress in seeking permitting approval from the Southwest Florida Water Management District and the Natural Resources Conservation Service. The project impacts approximately 34,000 acres of the 71,000 acre Alico Ranch, making it one of the largest private water storage programs in Florida. The Company is extremely proud of developing this venture because it protects historical lands in central Florida from development, provides a significantly more cost efficient solution for the state’s water storage programs, addresses longstanding Everglades pollution issues, and provides an important solution to numerous problems in central Florida and on both coasts caused by overflows from Lake Okeechobee.
Real Estate Dispositions
A core goal of Alico 2.0 is that the Company will not retain assets that depress its overall rate of return. A comprehensive review of Alico’s assets identified approximately $175mm of properties that generate no or low returns, including its office building in Ft. Myers, which was recently sold. Over the next two years, the Company expects that a substantial number of these assets will be sold. The proceeds from these sales will be redeployed or returned to shareholders.
Alico is a holding company with assets and related operations in agriculture and environmental resources, including cattle ranching, water management, and mining. Our mission is to create value for shareholders by managing existing assets to their optimal current income and total returns, opportunistically acquiring new assets and producing high quality agricultural products while exercising responsible environmental stewardship. Learn more about Alico (NASDAQ:ALCO) at www.alicoinc.com.