Bega to shut Peanut Company of Australia at Kingaroy, Tolga

Queensland’s peanut capital has been dealt a “devastating” blow with the closure of its famous factory and another site in the state’s north also grim news for growers. LATEST.

Kingaroy’s century-old peanut factory is being shut with the company behind the business saying its hand has been forced by ongoing multimillion-dollar operating losses.

Kingaroy’s century-old peanut factory is being shut with the company behind the business saying its hand has been forced by ongoing multimillion-dollar operating losses.

It’s understood 150 jobs will go, with the impact on the South Burnett described by Nanango MP Deb Frecklington as a “deeply disappointing blow” to her community.

Bega announced on Wednesday it would close down its Peanut Company of Australia factories in the South Burnett and at Tolga, near Cairns following a year-long review of the subsidiary.

Reports on the closure said it would be done in stages over the next 18 months.

The Peanut Company of Australia is reported to have suffered ongoing operating losses of between $5 million and $10 million a year.

The move is expected to include the payment of about $10 million in closure and redundancy costs.

Kingaroy’s century-old peanut factory is being shut, with the company behind the business saying its hand has been forced by ongoing multimillion-dollar operating losses.

Staff will be offered redundancies and support where possible, the company has said.

In a statement about the closure the company said it “had been under sustained financial pressure for several years prior to its acquisition by Bega Group in 2017”.

“Despite ongoing investments made by Bega Group into PCA’s operations, including significant upgrades to site safety and initiatives aimed at supporting local growers to boost production, Bega Group has not been able to establish a sustainable business model,” the statement.

Bega Group Chief Executive Officer Pete Findlay said several options were explored before reaching the decision to close.

“We announced the strategic review over 12 months ago and we have pursued several options to sell the business,” Mr Findlay said.

Bega Group Chief Executive Officer Pete Findlay said several options were explored before reaching the decision to close. pic David Martinelli

“Unfortunately, we’ve been unable to secure a buyer that could sustain a long-term future for employees and growers.

“We understand the impact this decision will have, and we will work closely with growers and the approximately 150 employees at the Kingaroy and Tolga facilities to support them through this period.

“Employees will be offered redundancies, support services and redeployment incentives and opportunities where possible. Some employees will also be able to continue in their roles until closure.”

The company, and its predecessor, have been fixtures in Kingaroy for almost a century.

The South Burnett has been the centre of the state’s peanut industry since the 1920s, with the Queensland Peanut Marketing Board (which became the PCS) created in 1924 and based in Kingaroy.

Kingaroy’s peanut silos were built between 1938 and 1951.

In a statement on Wednesday afternoon, Ms Frecklington said staff, growers and the region as a whole would be impacted by Bega’s decision.

“Bega is a highly profitable multinational company and this decision will devastate the local community who have been loyal to the brand for many years,” she said.

“Kingaroy has long been synonymous with peanut growing and processing and PCA’s processing business – and its heritage listed peanut silos in Haly St – have been an iconic local landmark for nearly a century.”

Nationals Leader David Littleproud said it was a “tough day for Queensland agriculture and Bega’s employees and contractors”.

He said PCA processed 19,000 tonnes of Aussie peanuts each year and he was “deeply saddened” by Wednesday’s announcement.

Originally published as Bega to shut Peanut Company of Australia at Kingaroy, Tolga