Coca-Cola Amatil has announced it will sell its struggling fruit and vegetable processing unit SPC after it made a “modest loss” in the first half of the year.
In August, Amatil began a strategic review of the business, looking at how to unlock growth, through a change in ownership or a merger.
The review coincided with the completion of a four-year AUD 100 million ($73.6 million) co-investment in SPC in conjunction with the Victorian government in Australia.
Investment under this agreement included AUD 22 million ($16.2 million) by the Victorian government and AUD 78 million ($57.4 million) by Coca-Cola Amatil.
Alison Watkins, Coca-Cola Amatil group managing director, said the review had identified “significant strengths” in the SPC business, and there was “strong market interest” in exploring a possible sale.
“The review has concluded that the best way to unlock these opportunities is through divestment, enabling SPC to maximise its potential with the benefit of the recent AUD 100 million co-investment, while Amatil sharpens its focus as a beverages powerhouse,” she said.
“There are no plans to close SPC. We see a positive future for the company as it continues to transform its operations.”
Coca-Cola Amatil has also announced that the IXL and Taylor’s brands will remain with SPC, as the expected sale to Kyabram Conserves is no longer proceeding.
Watkins said Amatil would develop a divestment timeline and process over coming months, but that it was business as usual for the SPC team at Shepparton and Kyabram.
Since acquiring SPC in 2005, Coca-Cola Amatil has invested around AUD 250 million ($183 million) of capital in the business, including in technology and equipment.
SPC employs about 500 people, mostly around the Goulburn Valley in northern Victoria, where it is a buyer of produce from the area’s fruit and tomato farmers. Its brands include Goulburn Valley, IXL Jam, Ardmona and Perfect Fruit.