Coca-Cola Amatil to scale back SPC operations

Posted by Daniel Palmer on 5th August 2008

Coca-Cola Amatil Limited announced yesterday that they will consolidate their Victorian SPC Ardmona operations.

The announcement follows a comprehensive review of its SPC Ardmona operations in the Goulburn Valley, which was initiated “in light of the continued impact of the drought and the need to better manage the Australian fruit intake”.

The review determined that there is excess capacity in the Shepparton and Mooroopna plants in the Goulburn Valley and, consequently, the deciduous fruit production from Mooroopna will be consolidated into the Shepparton facility. The Mooroopna plant will be scaling down production to tomatoes, fruit snacks and some juice and paste production.

“SPC Ardmona is proactively taking this restructure to ensure our business remains competitive in the Australian and international markets,” advised Nigel Garrard, Managing Director of SPC Ardmona. “The continuing strength of the Australian dollar has made it more difficult to maintain a competitive position for Australian exports and has, correspondingly, made imports relatively cheaper. SPCA has come under increasing pressure because of the combined effects of the drought and a higher currency.”

Mr Garrard added that the restructure will ensure they can remain competitive at a domestic level, while international diversification can stimulate growth. “The rationalisation of our manufacturing facilities will lower SPCA’s cost base and ensure our ongoing competitive position in the domestic market,” he claimed. “In addition, we have actively diversified our business with the formation of a number of international joint ventures to supply packaged fruit and this initiative is delivering good growth and is rapidly becoming a more significant part of SPCA’s business.”

The consolidation will lead to the redundancy of approximately 50-60 employees and the requirement for less seasonal workers each year following the consolidation of the two sites. SPCA also expects to incur write-downs of redundant plant and equipment.

Job losses at the plants follow the reduction of 50 middle management positions by the company earlier this year.

The restructure appears to be a sign of the increasingly difficult conditions faced by manufacturers and retailers in the food and beverage industry, as they come in the wake of cutbacks at Starbucks and Don Smallgoods last week.

Just don’t mention the ‘r’ word, with Treasurer Wayne Swan telling ABC radio that discussion of a possible recession is “utterly irresponsible”.