PHOTO: Vegemite on the Port Melbourne production line.
Bega Group has recently completed the sale of its long-standing factory located in Port Melbourne, where Vegemite, an iconic Australian brand, has been produced for over 75 years. The company made this strategic move as part of its efforts to rationalize operations and reduce debt, ultimately selling the factory at 1 Vegemite Way for a substantial sum of $114.6 million.
Under the terms of the agreement, Bega Group will lease back the factory from the new owner, Charter Hall, for an initial period of 15 years. Additionally, the lease includes two options for five-year extensions, providing flexibility for the company’s future operations.
Bega Group has expressed its commitment to maintaining the production of renowned brands like Vegemite and Bega Peanut Butter at the same site, as stated in an official statement. The proceeds from the sale will significantly contribute to reducing debt and further support the company’s overarching strategy of focusing on market-leading brands.
As the largest food manufacturer in Australia that remains under domestic ownership, Bega Group has been actively expanding its portfolio in recent years. The company acquired Vegemite from Mondelez’s Australia for $460 million, followed by the purchase of Lion Dairy and Drinks business in 2020 for $534 million. This acquisition brought with it a range of well-known brands such as Dare, Farmers Union, Big M, Masters, Dairy Farmers, Yoplait, Juice Brothers, Daily Juice, Pura, and Masters.
As a result of these acquisitions, Bega Group embarked on a comprehensive restructuring process, involving the streamlining of manufacturing sites and brands. This business simplification program has now led to the divestment of the aforementioned property, aligning with the company’s strategic direction and goals.