Coca-Cola Amatil on Wednesday announced plans to discontinue all manufacturing operations in South Australia by 2019.
The company is planning to invest $90 million over three years to remodel its supply chain across Australia, including boosting operations in Queensland and West Australia as part of the restructure.
The closure of the Thebarton facility in Adelaide is expected to deliver the company a further $20 million in cost savings from 2020, as outlined in a statement to the ASX by the company.
The move, however, will force hundreds of Adelaide workers into redundancy.
CCA Group Managing Director, Alison Watkins, said the announcement was the outcome of a detailed review of the company’s Australian supply chain network.
“The review found that further development of our facility at Thebarton in South Australia was constrained by its CBD location, site layout, dated infrastructure and expensive logistics. We will therefore be closing our South Australian manufacturing facilities, principally at Thebarton, in 2019.”
Opposition Leader Bill Shorten and Liberal MP Steven Marshall both expressed their disappointment in the move.
It comes a day after Premier Jay Weatherill recommitted the state to a 50 per cent renewable energy target, adamant the move would be beneficial for jobs and business.
While the Premier and his ministers claim Coca-Cola had not told them energy costs were the reason for closing its Adelaide operations, CCA's statement attributed “expensive logistics” to its decision.
Coca-Cola Amatil’s Thebarton plant, which it took over in 1951, produces 19 million cases across more than 600 products annually, including the iconic glass Coca-Cola bottle range.
CCA will now look to funding a new glass production line and juice and dairy production capacity at its plant in Richlands, on Brisbane's outskirts, in addition to the $75 million investment announced last year.
The company hopes the move will contribute to its strong performance figures which were released on Wednesday.
In the meantime, the company has said it will work every affected employee to provide financial counseling, personal support and assistance in finding new positions, acknowledging the “committed and hardworking” South Australian manufacturing team.
Coca-Cola Amatil said it has opened up the possibility of redeploying some permanent staff within the company where possible.
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