Australia’s largest tomato grower SP Exports collapses with $31 million in debt
Tuesday, February 21, 2012/
SP Exports, the debt-laden tomato grower which supplies to Woolworths and Coles, has collapsed under the weight of low farm-gate prices and a series of disasters, including the state’s floods and two chemical oversprays from nearby properties.
The Queensland-based company, which also has operations in Victoria, has appointed KordaMentha as administrators. A creditors’ meeting will be held on 29 February.
The company has a $31 million debt load, with unsecured creditors owed about $12.5 million and secured creditors owed about $18 million.
“Assets available to meet unsecured creditors and employee claims are minimal,” KordaMentha said.
KordaMentha said the flood/rain in 2011 and an extended run of low pricing contributed to the company’s financial difficulties.
Employees are owed in excess of $500,000. About 60 people lost their job last week, with hundreds more tomato-pickers out of work and some complaining wages have not been paid. Labour firms told a Queensland newspaper late last month that they were owed money by the business.
“Administrators are currently trading in a limited capacity and are reviewing all future harvests and decisions in that regard,” the administrators said.
Managing director Andrew Philip is reported to have told growers that low prices for tomatoes after a glut had gutted demand for truss tomatoes in 2011.
It reportedly put more than 1,160 hectares of farm land and hour homes in Queensland’s Childers on the market late last year.
The family-owned business started life in 1948 when Ian Philip established a horticultural share-farming operation in New South Wales and the first tomato crop was grown in 1952, according to its website.
In 1983, the family moved to Bundaberg, and set up a joint marketing company with another growing family, the Simpsons. The company was named SP Exports (Simpson Philip Exports) and started exporting to New Zealand and Asia.
In 1998, the Philip family bought out the Simpson family, and ownership was shifted from Ian’s son Norm and his wife Paula, to their sons Michael, Kevin and Andrew and his wife Camilla, the website says.
The collapse is one in a series of food collapses in Australia over the past few years, including that of tomato processing giant Cedenco in 2009 and Bundaberg-based food and vegetable grower Barbera Farms last year.
Addamo, a 35-year-old fruit and vegetable supplier and packager in Victoria, collapsed in late 2011 after racking up more than $5 million in debt to banks and suppliers.
The major supermarkets accounted for about 80 to 90% of Addamo’s patronage. Its liquidator, Shane Cremin of Rodgers Reidy, blamed the increasing price of buying from farms due to floods in early 2011, the general economy and a decision by a key customer to reduce its operations for the collapse.
The executive chairman of packaging giant Visy Industries Anthony Pratt said late last year that Australia “has what it takes to feed 200 million people”, but had taken its eye off food manufacturing.
“The country has witnessed the closure of many food manufacturing plants in recent decades, from regional abattoirs, to fruit processing, flour milling and the many industries that supported them,” Pratt was quoted saying.
“The loss of much of our food manufacturing capacity has gone largely unnoticed because it happens in small increments.”
“The irony is that we have a competitive advantage because of the quality of our food.”
SP Exports was contacted for comment this morning.
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