150 jobs at risk in peanut butter shock
The company announced on Wednesday that it would begin a phased shutdown of PCA's facilities in Kingaroy and Tolga over the next 18 months.
The closure follows a 12-month strategic review and years of ongoing financial losses.
'PCA had been under sustained financial pressure for several years prior to its acquisition by Bega Group in 2017,' the company said in a statement.
'Despite ongoing investments made by Bega Group into PCA's operations, including significant upgrades to site safety and initiatives aimed at supporting local growers to boost production, Bega Group has not been able to establish a sustainable business model.' Peanut processing facilities in Kingaroy and Tolga will be shut down. Peanut Company of Australia Credit: Supplied
The business said it had been operating at a loss of $5-10m per year and are anticipating one-off shutdown costs of $5-10m.
Bega said the shutdown comes amid growing challenges in the Australian peanut industry, including import competition, rising costs, falling production, and better returns from alternative crops.
'We announced the strategic review over 12 months ago and we have pursued several options to sell the business. Unfortunately, we've been unable to secure a buyer that could sustain a long-term future for employees and growers,' Bega Group chief executive Pete Findlay said in a statement to the ASX. Bega has announced the closure of two peanut processing factories in Queensland, including the historic Kingaroy plant. Supplied Credit: Supplied 150 jobs are on the line as a result of the closure. Supplied Credit: Supplied
The company said it would offer support services, redeployment incentives and redundancy packages to affected employees, some of whom will continue in their roles during the wind-down period.
'We understand the impact this decision will have, and we will work closely with growers and the approximately 150 employees at the Kingaroy and Tolga facilities to support them through this period,' Mr Findlay said.
Bega had informed growers in August last year that it could not commit beyond the current season's crop.
PCA and its predecessor organisations have been based in Kingaroy since 1924.
The town has long been associated with peanut production, and its iconic peanut silos were built between 1938 and 1951. Local member Deb Frecklington said the decision was a 'deeply disappointing blow' for the community. NewsWire / John Gass Credit: News Corp Australia
Nanango MP and Queensland Attorney-General Deb Frecklington said the announcement was a 'deeply disappointing blow' in a statement on Wednesday.
'Bega is a highly profitable multinational company and this decision will devastate the local community who have been loyal to the brand for many years,' she said.
'Kingaroy has long been synonymous with peanut growing and processing and PCA's processing business – and its heritage listed peanut silos in Haly St – have been an iconic local landmark for nearly a century.'
Nationals Leader David Littleproud said he was 'deeply saddened' by the announcement saying PCA processed 19,000 tonnes of Aussie peanuts each year.
Bega said it would continue to operate facilities in Crestmead and Malanda, along with its existing distribution network in Queensland.
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