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SPC Ardmona wins government funding

SPC Ardmona’s future in Shepparton has been secured for at least the next five years, with the Victorian Government tipping $22 million into the company.

February 18, 2014 11:00am

Premier Denis Napthine and deputy Peter Ryan at the SPC Ardmon factory.

SPC Ardmona’s future in Shepparton has been secured for at least the next five years, with the Victorian Government tipping $22million into the company.

The $100million co-investment package was ticked off by SPC Ardmona parent company Coca-Cola Amatil and announced by the government on Thursday.

Coca-Cola Amatil will provide the rest of the funding.

Victorian Premier Denis Napthine said the government was confident of the company’s business plan.

‘‘This is a critical time for SPC Ardmona — the very future of this plant was on the line,’’ Dr Napthine said.

‘‘The Victorian Coalition Government through its co-investment with SPC Ardmona has delivered security and safety for the future of this plant.’’

Several conditions have been attached to the deal, including maintaining at least 500 full-time equivalent staff in Shepparton for the next three years.

SPC Ardmona will be required to remain in Shepparton for the next five years.

If it withdrew from the region it would be required to refund the Victorian Government’s contribution.

The money will be used to drive new product, packaging innovation and efficiency measures at the cannery.

Victorian Deputy Premier Peter Ryan said through innovation the company could capitalise on the growing Asian market.

‘‘It needs to make the transition away from what some would say has been the historical product ... into a product which meets the contemporary means of consumers,’’ Mr Ryan said.

‘‘Not only within Australia, but the market beyond.’’

The amount is less than the $140million originally proposed by the company.

SPC Ardmona’s original proposal involved $25million each from the Victorian and federal governments.

The company would have provided an additional $90million.

The plan was scuttled when it was rejected by Federal Cabinet, drawing strong criticism from Federal Member for Murray Sharman Stone.

SPC Ardmona managing director Peter Kelly said the co-investment would allow the company to innovate.

‘‘This $100million capital investment package, while not the amount we originally planned, is significant,’’ Mr Kelly said.

Following Federal Cabinet’s refusal to assist SPC Ardmona, Coca-Cola Amatil announced a material review, including a write-down in the company’s assets.

Coca-Cola Amatil group managing director Terry Davis confirmed the write-down would go ahead last week.

‘‘Coca-Cola Amatil’s board of directors is comfortable with the returns expected for SPC Ardmona under the new investment package,’’ Mr Davis said.

‘‘Notwithstanding that, in order to right size the business, write-downs will occur in the 2013 accounts. These will be detailed further at Coca-Cola Amatil’s full year results presentation this week.’’

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