Sector News

Coca-Cola to close South Australia factory with loss of nearly 200 jobs

February 22, 2017
Food & Drink

Coca-Cola Amatil has announced the closure of its South Australia factory in the latest employment blow to hit the state.

Around 180 workers will lose their jobs when the bottling operation in the inner-city Adelaide suburb of Thebarton closes in 2019.

South Australia has the second-highest unemployment rate in the country – 6.4% – and will this year see the closure of the Holden car factory in Elizabeth with the loss of around 1,000 jobs.

Coca Cola boss Alison Watkins said it had reviewed its supply chain to maintain “competitiveness in the market” and decided it was not viable to update the Thebarton factory.

But the defence minister, Christopher Pyne, said on Wednesday the company was leaving his home state because of high business costs and concerns about the reliability of the power supply.

“We can’t keep going on as a high-tax, highly expensive place to do business with the highest electricity prices in the country and the most unreliable electricity supply in the country and this is where the rubber starts to hit the road for businesses,” Pyne told FiveAA radio.

The Labor premier, Jay Weatherill, has been fiercely criticised by the Coalition for closing down the state’s last coal-fired power station.

But he tweeted that the government would “stand by Coke workers at this difficult time”.

Union United Voice said plant employees, as well as the union itself, were blindsided by the news. “Our members were gobsmacked,” the communications officer, Carolyn Smart, told reporters in Adelaide.

“Yesterday they were told that today’s shifts were cancelled and to come in for a meeting about the future of their work. They spent a restless and anxious night worrying about what the morning would bring.”

Smart said the union would work with members to secure their entitlements and to help them find new jobs. But she said it was a “daunting prospect”, particularly for older staff who had been in the manufacturing industry a long time.

“It’s very difficult in this environment in SA, with the declining manufacturing sector,” she said. “Many of these workers have worked here for over 30 years in the same job, doing the same role. They’re very skilled but it’s going to be difficult to find work for them.”

Watkins said the company found that further development of Thebarton “was constrained by its CBD location, site layout, dated infrastructure and expensive logistics”.

“This isn’t a decision we have taken lightly, but we know it will be important for ensuring our position in the market into the future.”

The company would instead spend $90m on improving its facilities at Richlands in Queensland and shift some naufacturing to sites at Kewdale in Western Australia, Moorabbin in Victoria and Northmead in NSW.

The company on Wednesday booked a 37.4% drop in annual net profit to $246.1m, hurt by a $171.8m after tax writedown on its SPC fruit canning business. Annual total revenue rose 1.3% to $5.25bn.

Coca-Cola also announced the departure of its long-standing chairman, David Gonski, in May. He will be succeeded by non-executive director Ilana Atlas.

The company announced a 75% franked dividend of 25 cents.

Source: The Guardian

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