Food processor SPC is asking the Goulburn Valley community for a cash injection of up to $20 million to improve equipment, develop new products and help the company compete internationally.
Key points:
- SPC wants Goulburn Valley locals to invest in the company to help raise $20 million
- The company says its main objective is to get locals “back into the ownership of the business”
- The current owners purchased the company from Coca-Cola Amatil in 2019 for $40 million
The Shepparton-based company launched a new capital raising venture today available exclusively for people from the Goulburn Valley.
People from the region will be able to buy shares at what the company says is a discounted price – $1.17 per share – as the fruit canner looks to raise money for potential expansion.
SPC chairman Hussein Rifai said the plan was about reconnecting the 106-year-old business with the community where the company began.
“Really, the main objective of it is to get the original owners back into the ownership of the business,” he said.
“SPC has always been part of the valley. SPC started from the valley, the founders were people from the valley, the original share holders were people from the valley.”
He said the success of the company and people in the region was interlinked.
“There is nobody in Australia that would benefit more from the success of SPC than the Goulburn Valley,” he said.
Powering expansion
Mr Rifai said SPC is aiming to raise between $15 million and $20 million, with that money to be used to help the company expand in local markets and potentially overseas.
“Right now we are walking, we are just about getting ready to run, and very soon we will be looking at marathons,” he said.
“And we want to be able to compete with the rest of the global food businesses out of Australia, out of Shepparton.”
The new venture is the second time in less than a decade that SPC has asked for tens of millions of dollars.
The Shepparton Preserving Company was founded in 1917 as a co-operative, merging with fruit preserving company Ardomna in 2002.
Three years later, SPC Ardmona was acquired by Coca-Cola Amatil for about half a million dollars.
But the company struggled financially and and 2014, SPC and Coca-Cola Amatil received a $22 million assistance package from the Victorian government to help keep the company afloat and save hundreds of jobs.
Coca-Cola Amatil later sold SPC to the Shepparton Partners Collective for $40 million in 2019.
Committed to the future
Mr Rifai denied that the latest fundraising effort was a sign the company was in trouble financially.
“Absolutely not, not even close,” he said.
“It absolutely has nothing to do with the matching of the numbers between what the Victorian government gave to Coca-Cola versus what we are asking for.”
He said if money was the main motivator behind the decision, there would have been other, more profitable ways to go about acquiring it, adding that current ownership was “committed” to keeping SPC operating.
“We could have gone to the government or we could have gone to the broader investment community,” he said.
“When we bought the business in 2019, people were very worried that we were going to do a Dick Smith — that we were just going to strip it to pieces.
“We bought it for $40 million and we bought $300 million worth of assets.
“If purely it was a financial issue, the easiest thing to do is to sell the real estate, sell the product, sell this, sell that, pay the $40 million, put the rest in our pocket and go home.
“The easiest thing for us was to break it into pieces, sell it and walk away, but we are committed to it.”
Family connection
Sam Birrell the is the federal Member for Nicholls, where SPC is based.
The Nationals MP and his grand parents all once worked for the company.
Mr Birrell said SPC’s local investment strategy was a move to get Goulburn Valley locals to reconnect.
“I think this an effort by SPC to make people in the community … feel a connection and sense of ownership around the company,” he said.
“It will be interesting to see what interest they get from people who want to invest locally.
“This is about a sense of ownership and a sense of a community getting around a company.
“Good on them for being creative about this and I hope it works out.”
