Beverage behemoth Coca-Cola Amatil Ltd (ASX: CCL) has advised that it will shut its Bayswater (Victoria) manufacturing facility, costing 57 full-time workers their jobs. The closure program will not be immediate, but will instead be transitioned gradually over the next 12 months so as to not disrupt manufacturing capability or impact customers.
The production will be relocated to its larger capital city facilities as part of the company’s overall goal of maximising efficiencies and reducing costs. Coca-Cola Amatil’s Managing Director, Ms Alison Watkins, is expected to provide an update on Thursday regarding the strategic review being undertaken by the business, which hopes to reduce costs by up to $100 million over the next three years.
As unfortunate as it is for those Aussie workers, it seems that the decision was necessary. With tumbling profits, returns from the stock have significantly lagged behind those of the broader S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) since March last year, and management has the tough task of finding ways to turn the ship around.
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Motley Fool contributor Ryan Newman owns shares in Coca-Cola Amatil Ltd.