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SPC sees fruitful time ahead

Friday 15 June 2007

SPC Ardmona is negotiating an agreement to source products from South Africa adding to existing joint ventures in Thailand and Spain.

The alliances will give SPC the ability to source fruit and vegetables from five countries to sell in international markets, primarily the US and Europe, at significantly lower tariff rates while mitigating the impact of climate and agricultural risk.

At the same time, SPC is using Coca-Cola Amatil’s extensive distribution system in Australia to sell fruit and vegetable products in new places such as petrol stations, schools and convenience stores.

SPC expects the benefits of new business, overseas expansion, cost savings, efficiencies from warehouse consolidation and automated fruit sorting technology to flow through to profits next year.

Nigel Garrard, SPC Ardmona Managing Director, says neither the expansion plans nor the recent $20 million capital investment in warehousing and automation would have been possible if SPCA had remained independent.

Extracts from article in Financial Review

SPC Ardmona hits the market in Spain

July 2007

For the first time SPC Ardmona are now selling fruit into the Spanish market. The company has commenced receiving orders through a network of agents based throughout Spain set up by its locally based Sales Manager, Sr. Antonio Mateo Castro, ably supervised by UK sales Manager, Rob Washington.

Managing Director Nigel Garrard says of the development ‘It has been 6-8 months in the making and taken a considerable amount of effort from all associated with doing business in Europe. Of particular note is the support that has come from the Spanish nationals based in the SPC Ardmona office in Moratalla, both Rosa Sandoval Lopez and Juan Antonio Puerto Arias. Their efforts have been critical in the successful commencement of this project’ Mr Garrard continued.

Products launched included the 3 main 1kg packs produced in Spain including Sliced Peach, Sliced Pear and Fruit Trio soon to be followed by Pineapple Chunks and Tropical Fruit Salad in the 220gm and 400gm size, sourced ex Thailand.

Mr Garrard stated ‘The benefits that SPCA offer with its range of fruit in plastic options to the market in Spain, and indeed throughout Europe, is seen in a very positive light by the market. Features including all natural, convenient and resealable provide a genuine point of difference to a basically non existent canned fruit section in most supermarkets.’

‘We look forward to the exciting potential this market offers us as we look to continue to drive the benefits that SPCA fruit offers in plastic containers’, he concluded.

CCA reviews 2007 strategy

Coca-Cola Amatil (CCA) recently announced results of its 2007 strategic review.
The review focused on changes the organisation needs to make to best leverage CCA’s core competencies, those being:
Development of premium and market leading brands
Scale and reach of the sales force
High tech and high touch of our customer servicing capability; and
Highly efficient national manufacturing and physical distribution capability
CCA has also established a Food & Services division which will include SPC Ardmona, Neverfail, Quirks and Grinders, reporting to Nigel Garrard, Managing Director – Food & Services. Bringing these businesses under one umbrella will provide a greater focus on successfully managing CCA’s lower volume and non trade operations while maintaining the integration benefits made post acquisition. In addition, it simplifies the reporting structure within the Australia & NZ business, allowing the beverage management team to focus on the execution of the emerging alcoholic beverage strategy while continuing to drive growth in non-alcoholic beverages.

Coca-Cola Amatil completes acquisition SPC Ardmona

March 2005

On the 25th of February 2005, Coca-Cola Amatil’s acquisition of SPC Ardmona Pty Ltd was formally completed. SPC Ardmona shareholders, including its many grower shareholders, voted overwhelmingly to accept the takeover offer in early February 2005.

SPC Ardmona is Australia’s largest producer of packaged fruit and operates 6 principal brands across the processed fruit, vegetables, jams and sauces markets. These brands are SPC, Ardmona, Goulburn Valley, IXL, Southern Cross and Taylor’s.

CCA intends to continue operating SPC Ardmona as a separate business unit. A detailed strategic review of both SPCA and CCA’s existing beverage business will be undertaken. The review will address the immediate opportunities and synergies, as well as assess the medium term direction of CCA’s overall business. Benchmarking of world’s best practice will be undertaken across the industry, right from the fruit on the tree through to the final package consumed.

SPC Ardmona to expand to Spain

2004

At today’s Annual General Meeting, SPC Ardmona announced that it had reached agreement to establish a production base in Spain, to secure the European markets.

Based on its successful Thailand model, SPC Ardmona will invest $4.1 million to install its highly successful “Fridge Pack” fruit production technology in a site operated by its new joint venture partner. The joint venture partner will be responsible for sourcing of raw materials, provision of local labour and plant operations.

The decision comes after a very successful trial of the 1kg Fruit “Fridge Pack” products in the United Kingdom. Sold under the SPC brand, the products have been trialled in both Safeway and Tesco supermarkets with good results.

Commenting on the decision, SPC Ardmona Managing Director, Mr Nigel Garrard, today said “We are very pleased to be able to leverage our successful technology and open up new markets for our products”.

“Establishing a production base inside the European Union improves the financial return on the product due to lower costs of raw materials and the absence of import duties that apply to Australian products exported to the EU”.

“The investment is relatively low risk because of the arrangements with the joint venture partner who already has a solid production facility in the key growing areas of Spain. It is an arrangement of mutual benefit and still affords SPC Ardmona the ability to control sales and marketing”, Mr Garrard added.

The facility is expected to be operational by September 2004.

SPC Ardmona to acquire Henry Jones IXL

June, 2004

Leading Australian food company, SPC Ardmona Ltd, announced today it had agreed to acquire the Henry Jones IXL business (“Henry Jones”) from US based The JM Smucker Company. The Henry Jones Foods business is located in Kyabram, in Victoria’s Goulburn Valley and is close to SPC Ardmona’s existing manufacturing sites at Shepparton and Mooroopna.

Henry Jones is an icon Australian food company that manufactures and markets the IXL, Allowrie and Glen Ewin brands in the fruit spreads category where it is Australia’s leading manufacturer. The IXL brand is also prominent in the nutritious fruit snacks category. In addition, Henry Jones manufactures and markets the premium Taylor’s brand of specialty sauces and marinades.
The IXL brand has a history of over 100 years and SPC Ardmona’s purchase returns the icon IXL brand to Australian ownership.

Commenting on the acquisition today, SPC Ardmona Managing Director, Mr Nigel Garrard said, “We are very pleased to have been able to reach agreement to acquire such a long established and successful food business. Returning these icon brands and production to Australian ownership after 15 years of overseas ownership is another step along the path towards building ‘The Great Australian Food Company’, a strategy we will continue to follow”.

“Henry Jones is the leading manufacturer in the fruit spreads category and has developed the IXL brand as a growing participant in the nutritious snacks category. We are also excited at the opportunities available to grow the premium Taylor’s brand, which comprises a range of specialty sauces and marinades”, he added.

The Henry Jones business has a rich tradition in the Australian food industry, having been established in 1859. The IXL brand was first used in 1898 and it has been part of the Australian food industry ever since.

Settlement of the acquisition is expected to occur by 30 June 2004.

SPC Announces Merger with Ardmona

September 2001

Two of Australia's largest food processing companies, S.P.C. Limited and Ardmona Foods Limited, will merge to create a globally competitive Australian-owned food company in an industry increasingly dominated by foreign owned companies.

SPC Limited will change its name to "SPC Ardmona Limited" to reflect the merger.
Both companies began over 80 years ago as grower co-operatives to process fruit grown locally in the Goulburn Valley region of North East Victoria. SPC was listed on the Australian Stock Exchange in 1993, with the majority of its shares owned by SPC Holdings Limited which was listed on the Austock Exempt Market. In April this year, its capital structure was streamlined into one single listed entity with approximately 95 million shares on issue.

Ardmona is a highly successful business in fruit and tomato products and brings to the merged entity substantial operational and financial strength.
"The merger will enable two major players in the Australian food industry to pool their resources and expertise and present a stronger, united, Australian presence against low cost and subsidised international competitors.

"The merged entity is committed to retaining and enhancing its significant manufacturing operations in the Greater Shepparton region. This represents a long term commitment to our grower suppliers and to maintaining maximum employment levels for Australian workers.

"The increase in plant capacity available to the merged entity wil provide greater flexibility and enable us to improve manufacturing efficiencies, reduce costs and better meet the needs of our consumers.

"We believe the merger will be welcomed by residents and businesses of the Goulburn Valley. It makes obvious sense for two factories operating within five kilometres of each other to work together to build a long term, viable Australian-owned business which will be able to underpin the financial viability of its grower suppliers and guarantee maximum local employment levels." the two Chairmen said.

"I have great confidence in the future of the Australian food processing industry and I see this move as creating a vibrant family of Australian icon brands. This provides an excellent opportunity for us to further strengthen both companies' successful brand positioning.

"The merger provides us with opportunities for economies of scale, operational synergies and additional expertise which will make the combined company even more competitive in global markets, as well as providing us with opportunities to engage in import replacement activities in the domestic market.
"Ardmona brings the strong Goulburn Valley and Ardmona brands to SPC and further strengthens the position of the company in marketing of branded food products. Combined, we will have much strengthened clout in export markets”.

"We will be able to concentrate aggressive research and development programs and optimise investments in our manufacturing processes. This will enable us to build on recent domestic and international successes in technological development, including plastic packaging intiatives achieved through SPC subsidiary, Pak Technologies Pty Ltd and through initiatives undertaken by Ardmona, particularly in vision systems.