Lion has today announced it will be closing its juice manufacturing site in Lytton and transferring production to its Smithfield site in New South Wales. The change is expected to occur during the first half of 2014 and will see approximately 80 roles become redundant after March next year.
Lion spokesperson Natasha Whalley said the decision had not been taken lightly and had come after a lengthy review of the company’s juice manufacturing footprint.
“Both the Lytton and Smithfield sites are currently under-utilised, making it prudent for us to combine production at one site,” she said.
“The juice sector is highly price competitive and the category as a whole is under great margin and volume pressure in Australia,” she said.
“Establishing an efficient and flexible cost base allows us to be competitive and enable us to invest in innovation to build value in the category for the benefit of our company, suppliers and all stakeholders,” she said.
Lion currently has four juice manufacturing sites in Australia – Smithfield and Leeton in New South Wales, Lytton in Queensland, and Bentley in Western Australia.
The majority of the chilled and ambient juice produced at Lytton will be transferred to Lion’s Smithfield site. It is anticipated that production from Lytton will be transferred to Smithfield in the first half of 2014. The remainder of the volume will be outsourced to a co-pack facility during 2014.
Ms Whalley said they had chosen to keep Smithfield open because it is the more cost-efficient of the two production sites.
“Transferring volume from Lytton to Smithfield will help secure the long-term viability of the larger and more modern site,” she said.
“We will be working closely with the Lion people who are impacted by this decision, providing assistance where possible in planning for the future, consistent with normal Lion policies and processes,” she said.
“Overall demand for juice has fallen, and competition from imported juices and concentrate is increasing. As the largest local juice manufacturer and largest purchaser of juicing oranges it is vital that we have a sustainable business in this highly-competitive market.
“There will be no impact to our Berri, Just Juice, Daily Juice and Mildura brands,” Ms Whalley said.
There will be no impact to the juice volumes purchased by Lion from Australian fruit growers and no impact to Lion’s other juice manufacturing sites.