The initial term of the agreement is three years with renewal options that could extend the agreement for up to an additional six years. Supremex anticipates that sales under the agreement will start to ramp-up at the end of the fourth quarter of fiscal 2014. To execute this agreement, the Company will invest approximately $1 million in CAPEX during the second half of fiscal 2014.
"This multi-year agreement certainly validates our focus on related packaging markets both in Canada and the US. In addition to the benefits of a lower Canadian dollar, market conditions and opportunities south of the border have improved with some reduced capacity and changes to the competitive environment. This situation is translating into many more quotation opportunities for us," said Stewart Emerson, President and Chief Operating Officer of Supremex.
Supremex Inc. is Canada's largest manufacturer and marketer of a broad range of stock and custom envelopes and related packaging products.