(June 18) MENLO PARK, Calif. — Apio Inc. has sold its Reedley packing and cold storage plant to a strategic partner and has shifted capital that had been going into packing fruit, to expanding distribution of the fruit products it markets.

Landec Corp., Apio's parent company, announced the sale June 7.

Apio, based in Guadalupe, Calif., sold the land and facility for $2.2 million, resulting in a net gain of about $500,000 that will be used to pay down long-term debt.

The equipment in the facility has been leased. The lease contains an option to buy the equipment at the end of the lease term.

The sale of the processing plant should not adversely impact the company's tree fruit sales and marketing operations, according to a news release. Landec exited the business of processing tree fruit at the end of fiscal 2000, but it remained focused on the sales and marketing area, said Greg Skinner, vice president of finance and chief financial officer of Landec Corp.

"This will do nothing to decrease the volume of fruit we are selling," Skinner said.

Skinner declined to say who the strategic partner now running the plant is, but he said Apio will continue to market fruit under its Eat Smart brand name. He said Apio will focus on expanding markets both in the U.S. and internationally.

It exports fruit to Pacific Rim countries and to Europe.

Apio will maintain a sales office in Reedley, and that office has a new salesman, Duncan Marriott. Marriott, who has eight years of fruit sales experience, worked for the past three years as a salesman for Custom Produce Sales, Kingsburg.

Exiting the fruit processing operation has enabled Apio Inc. to make more strategic use of its capital and resources, said Nick Tompkins, chief executive officer of Apio. Besides expanding distribution of its products, Apio will continue to develop strategic alliances with major growers to support fruit sales and marketing programs, Tompkins said.

Apio's fruit division markets tree fruit and grapes. It now is marketing grapes for Bari Produce LLC, Selma, and would like to expand the types of fruit it markets, Skinner said.

Skinner said he thinks it is better for Apio to focus on its core businesses, which is marketing fruit, as well as packing and marketing vegetables. He said the fruit packing plant was empty for too much of the year, and that made it hard to turn a profit.