Coca-Cola Amatil (CCA) has commenced a strategic review of its fruit business SPC and says it is 'exploring new options' including a change in ownership, alliances or mergers.
SPC is Australia’s largest packaged fruit and vegetables processor, and the news comes at the completion of a four-year, $100 million co-investment in SPC with the Victorian Government.
CCAs group managing director Alison Watkins said the co-investment agreement was completed in June and included $22m from the Victorian Government and $78m from CCA which went into modernising the plant and creating new business opportunities to support SPC's ongoing growth.
“As we said at the time, without this investment, the future of Australia's best-loved packaged fruit and vegetable brands were in question,” Watkins said. “The co-investment is complete, and now is the right time to consider options for the business.
“We believe there are many opportunities for growth in SPC, including new products and markets, further efficiency improvements, and technology and intellectual property. The review will look at how this growth could be unlocked, potentially through a change in ownership, alliances or mergers.
“Importantly, there are no plans to close SPC. We see a positive future for SPC as it continues to transform its operations,” Watkins said.
CCA has invested around $250 million of capital in the business overall since acquiring SPC in 2005, but this has failed to translate into profits for the fruit processor, which according to CCA's results announcement today, booked a loss of $1.7 million in the half year to June 29.
CCA has engaged consultancy Kidder Williams to assist with the strategic review, which will not impact the ongoing sale process of the Taylors and IXL brands, which was announced by SPC earlier this year.
CCA delivered a statutory net profit after tax of $158.1 million, an improvement on its $140.1 million result in the same period last year, and an underlying NPAT of $178.8 million.
