SPC signs German deal to broaden its appeal

Australian food processor SPC has inked a deal with German ingredients supplier Dohler to form a joint business to supply the food manufacturing industry.

SPC says 2020 has been a nmixed year. Picture: Stuart McEvoy.

Australian food processor SPC has inked a deal with German ingredients supplier Dohler to form a joint business to supply the food manufacturing industry.

The two companies will take 50-50 ownership of Gourmet Ingredients, building on SPC’s processing capacity and Dohler’s extensive sales and distribution channels with the aim to expand further into Australia and Southeast Asia.

Gourmet Industries will also jointly develop intellectual property in the food manufacturing space in a bid to capitalise on growing appetites in developing markets.

The tie-up cements moves to reconfigure SPC after it was sold by Coca-Cola Amatil to Sydney-based investors Perma Funds in 2019 for $40m.

CCA bought SPC in 2005 for $700m, including debt, in a bid to capitalise on consumer trends for healthier food. However, the rise of supermarket home brands scuttled those plans.

SPC chief executive Robert Giles said the deal announced on Monday had been in the works since late 2019.

“The thing we’re most excited about is the innovation, where can we work with them to broader the appeal of our fruit and tomato products,” he said.

“Our opportunity to turn this business around is to put more volume through our current floor plan.”

SPC, whose wholesale business currently accounts for around 10 per cent of its sales, will transfer all wholesale customers to the joint venture. Its general manager will be recruited from within one of the two parent companies, with board seats also shared equally.

Mr Giles said 2020 had been a mixed year for SPC, with consumer sales during the COVID-19 lockdown booming, while sales to the hospitality industry were slammed.

“We’ve done the best we can to support that volume but it has put pressure on our ability to supply for the full year.

“We think we can get through but it’s very tight in the fruit categories,” he said.

While SPC has previously flagged an interest in the Malaysian and Singaporean markets, Gourmet Industries’ offices will be in Sydney and Melbourne.

SPC chair Hussein Rifai said the deal with Dohler brought together expertise that could give global customers what they ­wanted.

“Consumer palates have become much more sophisticated over time and they expect consistency, high quality, natural and nutritional culinary experience,” he said.

“There is no better way to ensure food manufacturing security than to follow our business strategy which is to become a global player in food production. With the right support and partners like Dohler, if you think globally, you can take our Australian innovation to the world.”

Doehler, which operates in 130 countries, has in recent years expanded into India, China, Central America and North Africa. Its Australia director, Peter Gates, said the company was impressed by the “new leadership” at SPC.