Bega Cheese has announced it will close its peanut processing business, which has been losing $5 million to $10 million annually, over the next 18 months. Peanut Company of Australia (PCA) had been under sustained financial pressure for several years before Bega acquired it in 2017, according to the company. Bega Cheese is an Australian diversified food company with a long history in dairy processing. The company manufactures, processes, and distributes dairy and other food-related products.
According to Bega, despite ongoing investments into PCA’s operations, including upgrades to site safety and initiatives aimed at supporting local growers, a sustainable business model could not be established. Bega chief executive Pete Findlay said the company was unable to sell PCA after launching a strategic review a year ago.
Mr Findlay said the company would work closely with growers and the approximately 150 employees at the Kingaroy and Tolga facilities to support them through the shutdown period. Redundancies, support services, and redeployment incentives and opportunities will be offered to employees where possible.
One-off shutdown costs, predominantly related to redundancies, are expected to be between $5 million and $10 million, with limited impairments anticipated. At 2.35pm AEST on Wednesday, Bega Cheese shares were down 1.8 per cent at $5.20.
