Australia’s Bega Group has successfully found a buyer for its peanut processing assets; however, it will proceed with the business closure.
Bega announced in July its plan to shut down the Peanut Company of Australia (PCA), including its factories in Kingaroy and Tolga, Queensland. This closure will occur in a phased manner over 18 months.
As of today, September 11, the company expresses optimism that approximately 30 of the 150 at-risk jobs may be saved after securing an agreement to sell the land, buildings, and equipment at the two sites to Crumpton Group.
Crumpton Group is a family-owned agri-food business based in South Burnett, also in Queensland. It engages in various stages of the production process—from shelling and roasting to processing and supplying raw peanuts to Australian customers.
Following a review of PCA last year, Bega concluded that it could not “establish a sustainable business model” for operations.
According to Bega, “Continued financial losses and industry challenges necessitated the review and the ultimate conclusion that the business would be better served by a change to local-focused ownership, or regrettably, closure.” This was reiterated by CEO Pete Findlay today, stating, “While it was always our preference to sell the Peanut Company of Australia, we are pleased that the land, buildings, and equipment located in Kingaroy and Tolga will remain in local hands.”
Bega stated it has collaborated with Crumpton Group to explore opportunities for job preservation, successfully identifying roles for some employees. Remaining staff will receive redundancy payments.
Findlay emphasized, “Bega Group remains committed to supporting its workforce through this transition and has worked with Crumpton’s to identify up to 30 potential roles for impacted staff.”
Although financial details of the sale were not disclosed, the asset transfer is anticipated to finalize in December, with a transition to the new owner set for June next year.
Sonie Crumpton, a family business owner, commented, “The acquisition of these assets will enable us to better serve Australian peanut growers in all regions moving forward. We will initiate discussions with peanut growers regarding the upcoming season.”
A Bega spokesperson clarified in July that the closure only affects PCA’s “raw” peanut processing operations; peanut butter production will continue in Port Melbourne.
Bega is also streamlining its operations elsewhere. In May, the company announced the closure of its cheese processing and packaging facility located in Strathmerton, Victoria.
Earlier in 2023, the company revealed plans to shut its milk manufacturing plant in Canberra, transferring production to a facility in Penrith, New South Wales.
Bega released its annual financial results for the year ending June 30, with statutory profit figures influenced by restructuring associated with its recent asset sales, including impairments related to the PCA closure.
Statutory EBITDA rose by 0.2% to A$165.5m ($109.3m). The company reported a loss of A$8.5m, down from a profit after tax of A$30.5m the previous year.
Revenue, based on these figures, increased by 0.5% to A$3.54bn.
On a normalized basis, EBITDA increased by 23.1% to A$202m, resulting in a positive profit after tax of A$50.8m, up 74% year-over-year.
Earnings per share stood at 16.6 Australian cents, compared to 9.6 cents.
