SPC plant closure to cut 150 jobs in Victoria

Australian-based food processor SPC Ardmona will cut 150 jobs and close its Mooroopna manufacturing plant due to a slump in trading as a result of the strong Australian dollar.

The planned closure was announced by SPC Ardmona owner Coca-Cola Amatil in a statement this morning.

Production of SPC Ardmona’s packaged fruit and vegetable products will be consolidated at the Shepparton and the smaller Kyabram facility, while the Mooroopna manufacturing plant will close.

Difficult trading conditions and “the sustained strengthening of the Australian dollar" was sited as reasons for the job cuts. The decision to close the plant followed a company review of business and trading performances which was undertaken to “right-size the SPC Ardmona business” said Coca-Cola Amatil group managing director Terry Davis.

The Coca-Cola Amatil review determined that SPC Ardmona was not maximising its manufacturing capacity and should close one of the three plants to reduce its excess production capacities. Shepparton and Kyabram plants will continue operate as normal.

The review also found that the stronger Australian dollar has reduce SPC Ardmona’s competitiveness in a number of export markets with exports reportedly halving over the past four years and has also increased the volume of cheap packaged fruit and vegetable products being imported into Australia.

A meeting was held this morning at a hall near the Mooroopna plant. Workers from the Mooroopna plant attended the meeting which concluded approximately 10am today.

Coca-Cola Amatil said affected employees would have alternative employment opportunities within the company’s beverage business. The company is working with the Victorian Government to ensure all affected employees have the opportunity to retrain or build on their current skills through government subsidised training places.

Redundancies and relocation costs is estimated to reach approximately A$15m. The company said the consolidation process would be completed in stages over the next 12 months.

Assuming the Australian dollar remains at present levels, SPC Ardmona expects to generate an additional A$10-15m in EBIT per annum in 2013 driven by production benefits, which will flow through to cost of goods following the 2012 fruit season, and contributions from new earnings streams.

Davis reaffirmed the company’s is committed to maintaining its manufacturing base in Australia and believes that restructuring the SPC Ardmona business will help to lower its cost base to help regain its competitive position in the market place.

SPC Ardmona expects to process 140,000 tonnes of Goulburn Valley fruit and vegetables over the coming 2012 season.

Davis said SPC Ardmona will now focus on products in the higher growth snacking market.

“We have a number of new products in the pipeline with a strategy to increase our presence in the growing snack category by leveraging the Goulburn Valley and SPC brands into a broader range of snacking categories and by further expanding our range of brands into the convenience and other channels,” he said.

SPC Ardmona carries the SPC, Goulburn Valley, Ardmona, IXL and Taylors brands.

Coca-Cola Amatil acquired SPC Ardmona in 2005.

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