SPC, a manufacturer of fruit, vegetables, and other packaged goods, has entered into a merger agreement with the Original Juice Company (OJC), incorporating Nature One Dairy into the deal. This development was disclosed through a statement to the Australian Stock Exchange, highlighting the merger's dependence on OJC shareholder consent.
SPC, with a century-long history in Victoria's Goulburn Valley, is renowned for its extensive range of packaged fruits, beans, spaghetti, and meals. Nature One Dairy specializes in powdered milk products, enjoying a market presence across Asia and Australia. The merger is anticipated to generate over $400 million in revenue in the upcoming fiscal year.
The merger arrives at a critical juncture for SPC, which has seen a reduction in demand for its Australian-grown fruits due to competition from imported goods. This led to a significant cut in peach and pear production earlier in the year. Efforts to enhance global competitiveness included a capital-raising initiative aimed at funding equipment upgrades.
OJC, which operates out of Melbourne and collaborates with 45 growers in New South Wales, is expected to benefit from the merger through increased production capabilities. Jeff Kennett, OJC's outgoing president, emphasized the importance of bolstering Australian manufacturing to support local growers and produce health-focused products for both domestic and international markets.
SPC aims to continue leading in the Australian and global markets, focusing on creating healthier food options. The merger is set to leverage SPC's underutilized spaces at its Shepparton facility to boost OJC's production, while also aiding Nature One Dairy in reducing costs associated with production, storage, and distribution. The combined operations are projected to significantly increase OJC's revenues for the 2024 financial year.
Upon completion, the merged entity will see Hussein Rifai as chairman and Robert Lervasi as the global managing director. The merger is viewed as a strategic move to ensure the continued support of Goulburn Valley growers and to potentially introduce new revenue avenues for local businesses.
Industry stakeholders have expressed optimism about the merger, seeing it as a vital step in supporting and investing in Australian growers amidst challenges faced by the sector.
Source: ABC News