Visy has offloaded its Penrith factory in a $17.25m sale and leaseback deal that will see the company continue to run a glass sorting and recycling operation from the premises.
The 42,000-square-metre plant has been bought by Sandran Property, with Visy taking a seven-year lease on the 8000-square-metre warehouse, with renewal options. Penrith is one of 120 sites that Visy operates from.
The Visy glass-sorting operation mainly supplies O-I Glass, which is located in the same street. O-I Glass ANZ was up for sale, but that process has been deferred until the Covid-19 crisis diminishes. Visy is believed to be the main potential buyer of the business. A sale is expected in the next few months.
If Visy bought O-I Glass ANZ, it would become the sole local producer of cartons, cans, and bottles, making for a highly leverageable trifecta.
O-I Glass has around 1100 staff in Australia, across five plants, including 250 in Penrith. In the year to March, its local business saw full year profits down by four per cent, operating profit down by 35 per cent, and segment profit margin down to 3.4 per cent from 5.3 per cent.