Alva Review-Courier -

The Value Added Products (VAP) plant in Alva celebrates its 24-year anniversary in 2024 with the yeast rising. Attendees of the Jan. 13 annual investor meeting had reason to celebrate because the cooperative (owned by area wheat producers, landowners and other investors) actually showed a profit – the first time in seven years.

VAP's revenue increased by 13.7 percent, according to VAP CEO Steve Sterling of Alva. Sterling was a longtime board member before taking the lead two years ago to help the financially struggling company.

Incorporated in 1999, VAP produced their first frozen dough products in 2000. A group of movers and shakers, businesspeople, farmers and others dreamed the dream and VAP was born. Various economic development groups worked together to get it going and capitalized. The idea was to add value to the hard red winter wheat grown by farmers in northwest Oklahoma and south-central Kansas. Investors gave a minimum of $5,000 and some put in more. Tax credits for investors were involved.

Paying dividends to investors was also in the plan, but only happened once, in 2007; the dough rose and fell repeatedly through the company's history. The cooperative provides 40 to 60 jobs on average and stimulates the local economy.

The approximately 20 investors who attended the annual meeting got to sample pizza featuring VAP's premium crust. VAP sells their crust to the Dollar General store chain, which adds toppings like pepperoni and mozzarella cheese. The pizza with VAP crust is sold under the name "Screamin' Sicilian."

Some varieties of VAP's pizza crust are pre-proofed. That means the dough product doesn't have to rise before baking in the oven. The crust rises while baking in the oven. For businesses selling the pizza, the pre-proofed crust means minimized labor costs and wait time for their customers.

Sterling said, "My leadership team all attended the annual meeting, standing in the back, smiling and looking nice without their smocks on. It's very rewarding to have an engaged team. The subliminal message they sent to the board and the investors present meant more than anything I said. It was pretty cool."

Positive News and C-Pace Loan

Sterling proudly told investors that VAP is current on loan payments and interest due. Property taxes are paid to date. They ended the year current on accounts payable. They celebrated a successful audit for the June 1, 2022, to May 31, 2023, fiscal year. VAP received an A+ rating for an unannounced BRC audit. Profit was $241,000. Revenue increased by 13.7 percent ($671,000). "It's all good stuff," Sterling said.

VAP currently has 33 full-time employees, six part-time staff; two contract workers. Benefits per employee total $9,060.36. That includes medical, dental, vision and life insurance. Employees receive paid time off accrued by paycheck and the number years of service, and seven paid holidays. They also have a 401(k) investment that Sterling just implemented this year.

He said, "I'm trying to build a future here (in Alva) for people who can have a job and support their families."

As a reward for VAP employees' success, Sterling said they traveled to Tanganyika Wildlife Park and Zoo in Wichita and spent the day.

In his cost-cutting measures the last two years, Sterling said, "We cut costs and eliminated non-resident management positions, saving approximately $300K."

Sterling said it takes nearly $250,000 per month "just to show up." That's for utilities, insurance, loan payment, salaries, property tax, etc. That does not include the cost of ingredients, packaging, scrap, repairs, and so forth.

Melody Edwards (left) receives her Years of Service Award from Alicia Guyle, with CEO Steve Sterling in the back.

Sterling reminded investors the line they make dough and products on had a life span of about 20 years and here they are at 24 years. He and the board proposed funding a $2 million plant capital improvement project to continue operating efficiently, using a C-PACE loan. That will include Spiral updates (conveyor belts, electronics, freezer ceiling, decking, ammonia coil proofer), replacing the floor freezer ceiling, new drives and programming, and updating the mixer cage hardware.

Product and Customers

VAP currently makes 37 different pizza crusts in various sizes and weights. They sell both proofed pizza crust that goes from freezer to oven and unproofed, which rises before being baked. Sterling said they primarily make pizza crust plus a few select custom orders. VAP's new website, vapalvaok.com, shows their products in detail.

At the meeting Sterling showed slides indicating the company has more than a dozen customers and has sales over $5 million.

"Maintaining customer relations is important," he said. "Our goal is to build aligned partnerships with long-term customers vs. the transactional business experienced in the past. The process and equipment VAP uses produces premium products even after this many years in the industry."