Sysco Corporation (SYY) plans to invest a lump sum amount of $75 million for building a warehouse in Central Islip, New York, as reported by Newsday.
This cold storage is expected to serve as a distribution center for Long Island and the metro area.
Within two years of inception, the company said it will generate 185 new jobs for the city with average salaries of about $63,100, according to Islip Town officials. City officials feel that the project will also lead to 300 unionized jobs in the neighborhood. The company is in the process of getting a permit for the project. Construction is scheduled to begin in the coming weeks and will be fully operational by 2012.
During the construction phase, the project will be exempted from state and local sales taxes normally collected for goods and services of about $2.5 million. Sysco reportedly will also receive a 34% property tax exemption for a 14-year period.
The food service retail giant had bought 526,000 square foot industrial property in Central Islip for $30 million two years back. The property was owned by a private investor and housed a food distributor called C&S Wholesale Grocers.
Sysco, an acronym for Systems and Services Company is headquartered in the Energy Corridor district of Houston, Texas. The company caters to 400,000 customers comprising restaurants and health care and educational facilities.
The owner of brands like Supreme Sysco, Natural Sysco and Reliance Sysco generated sales of $9.4 billion in the second quarter of 2010, which were 5.8% higher than the year ago period. Net income generated was $258 million and diluted earnings stood at $0.44 per share.
Sygma, a subsidiary of Sysco recently took over the responsibility of distributing doughnut mixes, other ingredients and supplies to Krispy Kreme franchise and company shops in the eastern United States from Krispy Kreme Doughnuts Inc. (KKD).
Sysco currently holds a Zacks #3 Rank. On a long-term basis, we maintain an Outperform rating on the stock with a short-term Hold rating.
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