SPC raises $111m with Europe in mind

Century-old cannery SPC is pumped for international expansion, with chairman Hussein Rifai eyeing processing acquisitions in Spain to springboard into Europe.

SPC chairman Hussein Rifai, above, says the company’s $111m raising took longer than expected because it didn’t want to take the easy route by getting cash from China. Picture: NCA NewsWire / Dylan Coker

SPC, one of the country’s largest foods producers, has raised $111m in fresh capital from the South Australian billionaire Shahin family and AMIST Super as it eyes a major expansion in Europe.

The fruit-processing company, owned by Coca-Cola Amatil until a $40m sale in June 2019, has tapped Madrid-based investment bank Sigrun Partners to scout for a Spanish food processing acquisition to serve as a springboard for its expansion into the region.

SPC chairman Hussein Rifai said the capital raising had taken longer than expected because the company had wanted to select the right partners for the business.

“We didn’t want it to just jump on a flight and get the money from China, from Singapore or from the Gulf or from the US or somewhere like that, at least in the first round of funding,” Mr Rifai said after successfully completing the raising on Friday.

Both the Shahin family office Peregrine Corporation and AMIST Super have gained seats on SPC’s board.

“It‘s very, very helpful to get people who understand what you want to do from an Australian perspective, and we even were lucky enough to even get closer to people who understood the food industry,” Mr Rifai said.

Rounding off the capital raising is the sale to Charter Hall of the Shepparton cannery, which SPC will lease back.

Mr Rifai said the company was also considering Australian takeover opportunities, with an view to deepening SPC’s exposure to the commercial pre-packaged meal industry servicing nursing homes and hospitals, an area that has become critical during the pandemic as health rules created shortages.

“Really what we‘re doing is we’re releasing cash value out of our balance sheet to reinvest it back in our business. No dividends are being paid and nobody’s getting bought out or things like that,” Mr Rifai said. “All of that ($111m) is going back into the business and into growing our business in line with our strategy.”

Khalil Shahin, managing director of the family’s Peregrine Corporation – which generates more than $2.9bn a year from its service stations, convenience stores and food outlets – said he saw significant benefit from partnering with “a highly reputable Australian-owned and run business”. “Our investment is a vote of confidence for SPC’s management and strategic plans, particularly the expansion of its Australian and global footprint, with the aim of replacing imports wherever possible,” Mr Shahin said.

The SPC strategy centres on pumping up international expansion while ensuring “premium quality Australian goods remain available on home soil”. Mr Rifai says for food security, the country should be less reliant on imports.

Mr Rifai said he could not understand why there was not more government support for the industry, in the form of tax breaks or other incentives, saying that the country had a “holier than thou” approach.

Mr Rifai said more needed to be done about misleading labelling on imported food products, highlighting Italian-branded tomatoes that were actually harvested in China under oppressive working conditions.

“We keep hearing about world trade agreements but every other industrial country has 200 different ways of getting around that through subsidies, through tax rates, except us wanting to be holier than thou to our detriment,” he told The Weekend Australian.

The raising caps off a big year for Mr Rifai. He launched the first mandatory Covid-19 vaccine program outside healthcare and has successfully turned the century-old cannery around after it performed poorly under CCA.

During 2020, it launched 100 new food and beverage products, signing a deal to take a controlling shareholding in Kuisine, a Sydney-based business that manufactures prepared meals and finger foods through its subsidiaries the Kuisine Company, The Gluten Free Meal Company and The Good Meal Company.

This is where Mr Rifai sees the future for SPC, previously known for packing baked beans, pears, peaches and other fruit and vegetables into cans at its factory in the Goulburn Valley. He is hoping to replicate the prepared meals business via acquisitions in Spain, which he said was “the Goulburn Valley” of Europe as well as the gateway to North Africa.

“If you think of North Africa, Egypt, Morocco, Algeria, Tunisia, that part of the world, that‘s about 300 million people in population, in addition to Spain’s 50 million people” Mr Rifai told The Weekend Australian on Friday.