Campbell Soup Completes Solar Project - Analyst Blog


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In a move to enhance corporate social responsibilities (CSR) and minimize operating costs, Campbell Soup Company ( CPB ) has completed work on a 9.8-megawatt solar power system at its Napoleon, Ohio manufacturing facility.

The successful completion of the project was achieved due to the combined effort of Campbell, BNB Renewable Energy Holdings, Enfinity America Corporation, FirstEnergy Solutions and SunPower Corporation ( SPWR ).

To develop the project, Campbell entered into a power purchase agreement (PPA) with BNB in 2009, under which the former will buy 100% of the power generated in the facility. Later, FirstEnergy entered into a deal with BNB to purchase all the energy credits and environmental benefits generated from the project. Enfinity arranged funds (term financing) for the project from Wells Fargo & Company ( WFC ).

Further, BNB contracted with SunPower to engineer, procure and construct the project. The Sun Power Oasis system, which is designed and set up by SunPower, captures a total area of 60 acres. SunPower uses To Tracker technology, which has the capacity to generate highest energy per acre while minimizing power cost over the next 20 years or more. The Tracker technology captures 25% more sunlight than conventional fixed-tilt systems as it follows the sun's movement throughout the day.

Currently, the new solar power system is capable of fulfilling 15% of the facility's power requirement. By 2020, the company aims to source 40% of energy requirements from renewable or alternative sources while reducing energy consumption by 35% per ton of product produced. Since its commencement, the project has generated almost 200 jobs.

We believe the world's largest soup maker company will be able to make a positive impression in the markets, where it operates through its corporate social responsibility program.

Prior to this, Campbell acquired a four acre property in the City of Camden from Camden Gateway Properties, I, LLC. The move was a step toward the company's commitment to the State of New Jersey and the County and City of Camden to redevelop a Gateway Office Park in the city. We believe the acquisition will drive future development while creating new job opportunities within the city.

Our Recommendation

Campbell Soup is one of the world's leading manufacturers of convenience food products. Furthermore, a strong portfolio of well-established brands, including Campbell's, Erasco, Liebig, Pepperidge Farm, V8, Pace, Prego, Swanson, and Arnott's offer a competitive edge to the company and strengths its well-established position in the market.

Moreover, we believe that Campbell's prudent investment and strategic initiatives toward product innovation and brand building will lead to an increase in its customer base and profitability. Moreover, the company's continuous focus on research and development to further differentiate its higher-margin sauce brands will strengthen its position in international markets.

However, rising commodity costs, intense competition from other established players and exposure to unfavorable foreign currency fluctuations may undermine the company's growth prospects.

Campbell, which currently competes with General Mills Inc. ( GIS ) and H.J. Heinz Company ( HNZ ), has a Zacks #3 Rank, implying a short-term Hold rating on the stock. Moreover, we have a long-term Neutral recommendation on the stock.

CAMPBELL SOUP (CPB): Free Stock Analysis Report
GENL MILLS (GIS): Free Stock Analysis Report
HEINZ (HJ) CO (HNZ): Free Stock Analysis Report
SUNPOWER CORP-A (SPWR): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: CPB , GIS , HNZ , PPA , SPWR

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