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Australia: Coca Cola Amatil to sell its SPC fruit and tomato processing business
Coca Cola Amatil is considering selling its SPC fruit and tomato processing business, in which Victorian taxpayers have invested AUD 22 million in upgrades since 2014. CCA announced it has started a strategic review of SPC to grow the business, potentially through a sale or merger. SPC anticipates the review will be completed within six to nine months. The review does not affect an ongoing sale process relating to Taylors and IXL brands, which was announced by SPC in early 2018.
The announcement coincides with CCA releasing mid-year results that show “a decline in earnings driven by a modest (AUD1.7 million) loss for SPC”. CCA group managing director Alison Watkins said the company was reviewing how it could boost SPC’s growth on the back of taxpayers’ and its own AUD 78 million investment in the Goulburn Valley business.
“We believe there are many opportunities for growth in SPC, including new products and markets, further efficiency improvements, and technology and intellectual property,” Ms Watkins said. “The review will look as how this growth could be unlocked, potentially through a change in ownership, alliances and mergers. […] Importantly, there are no plans to close SPC. CCA is very comfortable with SPC’s current performance. We see a positive future for SPC as it continues to transform its operations.”
Addressing 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 added.
CCA’s financials show SPC has continued to struggle against cheap processed food imports in markets that are in decline. In its half-year results CCA states its SPC “revenue decline reflected the proactive exit of a number of private label lines, as well as continued competitive pressure".
“We improved our share in tomatoes slightly, albeit the category declined in the half (year). […] We grew in beans and spaghetti and increased our market share, albeit that this also continues to be a declining sector. We continue to experience pressure in fruit and spreads categories.”
SPC employs more than 500 people in fruit and tomato processing, with its main brands being SPC, Goulburn Valley, Ardmona, IXL, Perfect Fruit, SPC ProVital and Taylor’s.
Source: weeklytimesnow.com.au, abc.net.au/news
