SPC Ardmona is to shut its Mooroopna manufacturing plant in Australia with the possible loss of around 150 jobs.
SPC Ardmona, owned by soft drink giant Coca-Cola Amatil (CCA), has blamed the strong Australian dollar and increasing competition from cheap imported packaged fruit and vegetables for putting the business under pressure.
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The firm said today (9 August), that production of its packaged fruit and vegetable products will be consolidated at the company’s Shepparton and Kyabram facilities. All affected employees will be offered alternative employment with CCA, it said.
“We remain firmly committed to maintaining our manufacturing base in Australia and by proactively restructuring the SPC Ardmona business we believe we can lower its cost base to help regain its competitive position in the market place,” said CCA’s managing director, Terry Davis. “The strengthening of the Australian dollar over the past three years has regrettably led to a significant increase in the volume of cheap packaged fruit and vegetable products being imported into Australia. It has also led to a material increase in the share of the private label category which is being supplied primarily by imported products.”
The consolidation will be undertaken on a staged basis over the next 12 months. The company expects to generate an additional A$10m to A$15m in EBIT per annum in 2013 through the consolidation.
CCA recorded a drop in first-half net profit this morning, to A$153.6m, as a result of a one-time charge of A$80.5m (US$81.4m) on SPC Ardmona.
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By GlobalDataOperating profits (EBIT) however, increased by 3.3% to AUD386.1m, and sales climbed by 2.4% to A$2.26bn.
The firm’s alcohol, food and services’ earnings grew by 1.7% driven by a “solid” result from the services division and the first time inclusion of revenue and earnings from the agreement with Beam in April to sell spirits and ARTD’s as a principal rather than as an agent.
SPC Ardmona however, recorded an earnings decline as the business continued to exit a number of unprofitable export and domestic private label activities. Export sales declined by 35% over the last 12 months.
