SPC to be sold by Coca-Cola Amatil
The Coca Cola company's local bottler Amatil has announced today they will sell its SPC fruit and tomato business in Shepparton after it is expected to record a full year loss of around $10 million.
The move coincides with the end of a four-year investment of $78 million by CCA and $22 million from the Victorian government designed save the jobs of around 500 people who work in the manufacturer, mostly from the Goulburn Valley in Northern Victoria.
The soft-drink giant has said the decision towards divestment concludes the "strategic review" of the business launched in August to consider how to grow the business, potentially through a sale or merger, after it fell to a "modest" loss in the latest half.
But with the latest round of losses, the decision to divest the business will allow Amatil to "sharpen its focus as a beverages powerhouse", group managing director Alison Watkins told Fairfax Media.
Ms Watkins said CCA would develop a divestment timeline and process over coming months, but that it was "business as usual" for the SPC team at Shepparton until then.
SPC's brands include Goulburn Valley, IXL, Henry Jones, Taylor’s and Perfect Fruit. The Shepparton manufacturer has been in operation since the early 1900s and was bought by Coca-Cola Amatil in an aquisition that was finalised in early 2005.
Since acquiring the business, CCA has invested around $250 million of capital in the business, including technology and equipment including new tomato and high-speed snack lines, a new aseptic fruit processing system and expanding export opportunities to China.
Ms Watkins said there are "no plans to close" recognising that SPC is one of Australia's most loved brands, a household name in fruit, vegetables and baked beans.
She wouldn’t comment on potential buyers but Ms Watkins said there was “strong interest” and that Amatil will be progressing the sale over the coming months.
“There are a number of logical, interested parties who are probably in the position to give it a more single minded focus than we have and really accelerate some of the export growth as well as innovation.”
Ms Watkins said the Victorian government’s investment was “absolutely” well spent.
“If you go back to 2013, there was active discussion of actually closing the site up at Shepparton. Quite a number of other food and vegetable processes had at that time closed their Australian manufacturing bases and were importing products from other countries. So keeping that money has really shored up the future of that site.”
For those working in the facility, Ms Watkins said it will be “business as usual”.
“The best job security of all of course is an ongoing competitive location at Shepparton and that’s absolutely now what we have.”
“We’ve kept the Victorian government very closely involved every step of the way. They are very focused as we are on the future of SPC to continue to generate employment and economic activity for the valley.”
"We see a positive future for the company as it continues to transform its operations."