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May 27, 2011

AUS: Heinz details manufacturing consolidation in Pacific ops

HJ Heinz has announced it will move its beetroot, sauces and some of its meals production from three factories in Australia to a facility in New Zealand.

HJ Heinz has announced it will move its beetroot, sauces and some of its meals production from three factories in Australia to a facility in New Zealand.

The changes, part of the supply-chain revamp the US food maker announced yesterday (26 May), will see the production moved from plants in Girgarre, Brisbane and Wagga Wagga. The Gigarre plant is set to close, although the Brisbane and Wagga Wagga facilities will be kept open.

The output will move to Heinz’ facility in Hastings, New Zealand. However, the company does plan to invest A$25m (US$26.7m) in its in baby food plant in the Australian town of Echuca and in beverage production in Brisbane.

“Heinz operates a number of factories across Australia and New Zealand. Our decision to consolidate manufacturing is a critical step in our plan to become more competitive in a challenging environment, and to accelerate future growth in both markets,” said Heinz Australia CEO Nigel Comer.

The news follows yesterday’s (26 May) announcement that Heinz will “exit” five manufacturing sites worldwide, with the total loss of 800 to 1,000 jobs. The group said that the move was part of its efforts to improve profitability and streamline its businesses in developed markets.

“Heinz is committed to Australia, with more than A$20m being invested to upgrade the beverage manufacturing facilities at Northgate and A$5m invested to enhance the capabilities of the baby food facility in Echuca, Victoria,” Heinz Australia said.

The moves will result in the loss of 160 jobs at Golden Circle’s Northgate plant in Brisbane. A further 146 jobs will go at the Girgarre plant in northern Victoria, which will be closed entirely. Another 38 jobs will be cut at the Wagga Wagga facility in NSW. The company said it expects the changes to be completed within 12 months.

“After reaching this difficult but necessary decision, our goal is to support affected employees over the coming weeks and months,” Comer added. “The company will provide redundancy packages, counselling, job search services, new skills training and retirement planning services. Affected growers are being offered financial and other assistance for transition to other crops or supply arrangements.”

Peak horticulture organisation Growcom said the move would be a devastating blow for beetroot growers in the Lockyer and Fassifern Valleys, particularly after the floods earlier this year.

Growcom CEO Alex Livingstone said that some of the growers had a long association with the company going back 50 years and it was devastating news for them.

“There are immediate farm management and investment decisions that they will have to make in the days ahead,” he said. “Clearly, this is a business decision which Golden Circle has had to make, the same as a grower would on their farm, but it will be sad to see the end of beetroot production in Queensland: an iconic product and an industry worth around $10m a year. The bulk of tinned beetroot will come from overseas in future,” Livingstone said.

He claimed that, while the company had assured the growers that it would support them this season and would offer financial and other assistance for transition to other crops or supply arrangements, no details of this support had been yet offered to the growers.

“Golden Circle has treated growers with integrity in the past and one can only hope this will continue to be the case. The company has given assurances it will process the beetroot crop that is already planted in the ground – between now and November. However, there are no other practicable processing options after this year for Queensland growers,” he said.

Australian Food News is Australia’s leading resource for the food industry, delivering daily news from the grocery, retail and hospitality sectors to 40,000 professionals each month.

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