New owners of SPC hope they can return Shepparton business to its former gloryBy Alana Christensen
The new owners of SPC say the significance of the purchase of the 100-year-old business is not lost on them, with hopes they can return the fruit processor to its former glory.
Although their offices may be more than 700km away in the heart of Sydney’s banking district, Shepparton Partners Collective’s Hussein Rifai says there will be a hands-on approach to running the iconic Shepparton business.
A joint venture between Sydney-based investment firms Perma Funds Management and The Eights, Shepparton Partners Collective was assembled purely to acquire the fruit canning business for $40million.
While there will be challenges ahead, Mr Rifai said they want to see the ‘‘quintessential Aussie business’’ thrive.
‘‘Everyone grew up having SPC,’’ he said.
‘‘It’s had some stumbles along the way, but the staff are well trained, the factory is well equipped. (Former owners) Coca-Cola (Amatil) have really set that area up.’’
The stumbles that Mr Rifai refers to have been big ones.
Since purchasing SPC for almost $500million in 2005, Coca-Cola Amatil has struggled to turn a healthy profit in recent years.
There were concerns in 2014 the factory would be shut down, with a $22million cash injection from the Victorian Government helping to keep the gates open and upgrade the Andrew Fairley Ave factory and diversify its product lines.
In the past 14 years, Coca-Cola Amatil has invested more than $250million in the business, including the Victorian Government contribution.
However, in February, CCA wrote-down the value of the business from $124million to $0.
After six months of SPC being on the market, it had been sold for less than a tenth of what CCA paid for it in 2005.
Mr Rifai said it should come as no surprise to see two Sydney firms make a successful bid for SPC.
‘‘If you were a businessman like me, why wouldn’t you be interested in SPC?
‘‘The reasons why it stumbled are very clear.
‘‘A lot of companies with success get complacent. And when you look at Coca-Cola, it’s a beverages company so there’s not a strategic alignment (for them to purchase SPC).
‘‘Sometimes businesses take the attitude of if it ain’t broke don’t fix it ... Sometimes you just have market conditions that work against you.’’
Mr Rifai said falling profits were not a concern to him or the four other members behind Shepparton Partners Collective.
‘‘When you put it into perspective, this is a 100-year-old company. It’s had say five bad years,’’ he said.
‘‘That’s a good innings. But it needs work ... I don’t know a single business that doesn’t have to make tough decisions.’’
While reducing the complexity of the business, improving efficiency, building domestic and international channels, and product innovation will all be addressed, Mr Rifai also flagged changes in the way the business will be run from the management side.
‘‘When you work with such a large company like Coca-Cola, you tend to be very constrained, not as nimble. It does change the dynamic,’’ he said.
‘‘We need to be much more nimble and less ‘big brother’.
‘‘If (SPC managing director) Reg (Weine) calls us tomorrow and says he wants to change something, there’s three of us within a metre of each other that we can ask and talk about it ... We can do that within three minutes.’’
Although working at an investment firm, Mr Rifai said it would be wrong to say the group had no food production experience.
Mr Rifai spent a number of years working as a management consultant at Ernst and Young, helping to develop strategies for business giants such as Kellogg’s and Cadbury, and has strong experience in engineering and supply chain management.
He said the remaining partners had all the tools to help SPC grow, with experience across accounting and taxation, property and real estate, law and finance.
‘‘Between us we have involvement in retail and distribution and through the supply chain.’’