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Soft drink giant Coca-Cola Amatil (CCA) may sell its struggling SPC fruit and vegetable cannery, with a change of ownership among options to grow the operation.
CCA announced it has started a strategic review of SPC, based in Shepparton, to grow the business, potentially through a sale or merger.
SPC anticipates the review will be completed within six to nine months.
Since acquiring SPC in 2005, Coca-Cola Amatil has invested around $250 million of capital in the business, including in technology and equipment, but was threatened with a possible closure in 2014.
But Coca-Cola Amatil group managing director Alison Watkins said the company was ‘very comfortable’ with its current performance.
“Our focus is making sure that we are setting the business up by making the right choices, so it’s a really logical time to step back and look at alternatives,” Ms Watkins said.
“We’re very mindful of the role of SPC in the community, and we’re very comfortable to continue as owners, however we do believe other capabilities and other options are very important to consider.”
The review of SPC does not affect an ongoing sale process relating to Taylors and IXL brands, which was announced by SPC in early 2018.
SPC boss ‘not worried’
Photo: SPC Managing Director Reg Weine announces the commencement of a strategic review of growth options for SPC – Australia’s leading processor of packaged fruit and vegetablesAddressing the media in Shepparton on Wednesday, SPC managing director Reg Weine said a review of the company would offer the chance to explore further expansion opportunities in Asia.
“It’s really looking at how we can unlock the potential of SPC, looking at ways we can accelerate the growth,” he said.
And it’s really about taking our premium brands into Asia, taking our new products and accelerating that growth,” Mr Weine said.
“I think it’s important to say, CCA has been an incredibly supportive owner of the business. We don’t generate the same returns that other parts of the business generate and boards have to make strategic choices.”
Mr Weine said there was no threat to the 220 full-time workers in Shepparton, or the 1100 seasonal fruit pickers.
In a statement the Australian Manufacturing Workers’ Union said it was confident that SPC and its workers would continue operations.
Politicians divided over potential sale of SPC
But Victorian Nationals leader Peter Walsh said the potential sale of SPC was concerning for the region.
“It is a key part of the social and employment fabric of the Shepparton and wider community there,” he said.
“We recognise that when we were in government, which is why we put together a package to work with Coca-Cola Amatil to transition the company to the future.
“For Coca-Cola Amatil to now be saying they’re looking at selling the business on, I think that’s disappointing.”
He said the high cost of energy in Victoria had made SPC less competitive globally.
“All the food manufacturers that I talk to are all very concerned about the cost of energy here in Victoria and no doubt Coca-Cola Amatil is having that same discussion internally around SPC,” he said.
“The price of energy particularly for those businesses that are either competing with imports or are trying to export the price of energy is a real component to making them very uncompetitive in the world market.”
Independent Member for Shepparton Suzanna Sheed disagreed with Mr Walsh.
She argued the potential sale of SPC would socially and economically benefit the region.
“Whether that happens in Australia or by an overseas company who knows. It’d be great to see a local company that’s been gathering iconic brands to perhaps pull in and pick up SPC for the future of our region,” Ms Sheed said.
“I don’t see this as gloomy particularly. To have that factory flourish and survive and develop markets into Asia is really a pretty exciting feeling”.
She said Victorian Premier Daniel Andrews has assured her SPC will not close its doors.
“I’ve met with the Premier and he’s assured me that his government will stand by SPC and the workers at SPC,” she said.
Topics: food-processing, rural, food-and-beverage, shepparton-3630
