Australia’s Bega Group has found a buyer for its peanut processing assets but still plans to go ahead and close the business.
Bega announced in July it would shutter the Peanut Company of Australia (PCA) and its factories in Kingaroy and Tolga in Queensland in a phased manner over an 18-month period.
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The company said today (11 September) it is optimistic that around 30 of the 150 jobs at risk will be saved after it reached an agreement to sell the land, buildings and equipment at the two sites to Crumpton Group.
Crumpton Group is a family-owned agri-food business in South Burnett, also in Queensland. It is engaged across the production process, from shelling, roasting and processing to the supply of raw peanuts to customers in the Australian market.
After launching a review of PCA last year, Bega reached the conclusion that it could not “establish a sustainable business model” for the operations.
“Continued financial losses and industry challenges led to the need for the review and ultimately the conclusion that the business would be better served by a change to more local and focused ownership or in the absence of that being achieved, unfortunately a closure,” Bega said in July.
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By GlobalDataCEO Pete Findlay said today: “While it was always our preference to sell the Peanut Company of Australia, we are pleased that the land, buildings and equipment located in Kingaroy and Tolga will remain in local hands.”
Bega said it has worked with Crumpton Group to try and save some of the affected jobs, with some success, but otherwise it will be paying redundancy money to the remaining staff.
Findlay added: “Bega Group remains committed to supporting its people through this transition and has worked with Crumpton’s to identify up to 30 potential roles with Crumpton’s for its impacted workforce.”
While financial details of the agreement with Crumpton Group were not disclosed, the sale of the assets is expected to be completed in December followed by a transition to the new owner in June next year.
Sonie Crumpton, one of the family’s business owners, said: “The acquisition of these assets will allow us to better serve Australian peanut growers in all regions moving forward. We will soon be in discussions with peanut growers regarding the coming season.”
A spokesperson for Bega told Just Food in July that the business closure affects only PCA’s “raw” peanut processing operations, with peanut butter production continuing at Port Melbourne.
Bega has also been trimming assets elsewhere. In May, the company announced the closure of its cheese processing and packaging facility in Strathmerton in Victoria.
And early in 2023, the group said it would close its milk manufacturing plant in Canberra, with production relocated to a site in Penrith, New South Wales.
Bega issued its annual results in August for the year to 30 June, with statutory profit figures affected by the restructuring connected with its recent asset sales, including plant and equipment impairments related to the PCA closure.
Statutory EBITDA rose 0.2% to A$165.5m ($109.3m). The business slipped to loss of A$8.5m from a profit after tax of A$30.5m a year earlier.
Revenue based on that measure climbed 0.5% to A$3.54bn.
On a normalised basis, EBITDA increased 23.1% to A$202m, while profit after tax was a positive A$50.8m, up 74%.
Earnings per share came in at 16.6 Australian cents versus 9.6 cents.
