Coinciding with its full year results announcement today, Coca-Cola Amatil (CCA) has outlined plans to 'remodel' its Australian supply chain, closing its South Australia manufacturing plant and investing $90m in its Queensland facility.
CCA CEO Alison Watkins said: “We need to modernise and invest in new capability across our supply chain to maintain our competitiveness in the market.”
Following a detailed review of its supply chain, the company said it was aiming for “better utilisation of existing plant and a greater focus on technology and automation”.
Its Richlands QLD facility will benefit most from planned investment. In 2016 CCA announced it would pump $75 million into the Richlands site to deliver a new, expanded and automated warehouse with greater capacity, comparatively lower operating costs and reduced materials handling and truck movements.
Now, CCA plans to invest a further $90 million in a new glass bottling line and in expanding dairy and juice production capacity at the Richlands plant.
The Thebarton facility is scheduled for closure in 2019, with 180 jobs affected. Manufacturing would be spread across Richlands (QLD), Kewdale (WA); Moorabbin (VIC); and Northmead (NSW) plants.
The SA closure is expected to deliver $20m in cost savings from 2020.
Coca-Cola Amatil says it will maintain a strong workforce and presence in South Australia after 2019. Existing sales, distribution, warehousing, equipment servicing and Statewide Recycling teams in the state are unaffected by the changes.
Meanwhile, in its results announcement CCA reported underlying earnings before interest and tax (EBIT) of $683.4 million and underlying net profit after tax (NPAT) of $417.9 million representing growth of 3.5 per cent and 6.2 per cent respectively.
“This is a solid Group result for 2016, and reflects our continued progress in delivering the outcomes of the 2014 strategic review,” Watkins said.
“Once again we see strong performances in our identified growth markets of Indonesia, Papua New Guinea, Fiji and Alcohol & Coffee."
Watkins said CCA's New Zealand business achieved revenue and volume growth in Sparkling and Still Beverages. Sparkling benefited from CCA's partnership with Restaurant Brands, and water and energy were key drivers of the strong performance in Still Beverages.
However, CCA's Australian Beverages performance was adversely impacted by continuing competitive pressure in the water category, ongoing pressure on the cola category and the continued shrinking of operational accounts, with EBIT declining 1.8 per cent.
