Coca-Cola to close South Australia manufacturing operations

Production will move from South Australia to Queensland, NSW and Victoria. Pic:iStock/Mindstyle

Coca-Cola Amatil is remodeling its supply chain across Australia, increasing production in Queensland and Western Australia but closing the company’s manufacturing operations in South Australia in 2019.

Around 180 employees and contractors will be affected by the South Australia closure.

Alison Watkins, Coca-Cola Amatil Group managing director, said the company needs to modernize and invest in new capability across the supply chain to maintain competitiveness.

A $90m AUD ($70m USD) investment in Richlands, Queensland, will create a new glass production line and new dairy and juice production capacity. This is in addition to a $75m ($58 USD) investment announced in 2016, which will be used for an automated warehouse, lower operating costs and reduced truck movements.

The Thebarton facility in South Australia has been deemed to be constrained by its location, site layout, dated infrastructure and expensive logistics. Along with Richlands, manufacturing activities will be moved to Kewdale (Western Australia), Moorabbin (Victoria) and Northmead (NSW).

Coca-Cola says it will keep a ‘strong workforce and presence’ in South Australia, with existing sales, distribution, warehousing, equipment servicing and recycling teams unaffected.

Closing manufacturing facilities in South Australia is predicted to result in $20m ($15m USD) in cost savings from 2020. There is also expected to be approximately $50m ($39m USD) of one-off costs associated with the program, to be offset by surplus profit from the proposed sale and leaseback of the Richlands site and sale of the Thebarton site following its closure.