Adelaide food producer Spring Gully’s reversal of fortunes continued today courtesy of a half-million dollar State Government grant.
In April this year the company went into voluntary administration, owing an estimated $4.9 million after a drop in sales and productivity problems at the factory.
A groundswell of public support put some cash back into the business and in July it had traded out of trouble and back into the owners’ hands.
Premier Jay Weatherill went to the Spring Gully plant at Dry Creek today and announced the $576,000 grant, which is to be spent on new equipment.
“Spring Gully is a favourite South Australian brand and shoppers have got behind this family business since times became tough for them,” Weatherill said.
“The State Government is getting behind Spring Gully and its workers by providing a grant for new manufacturing equipment so they can remain competitive in the marketplace.”
Spring Gully’s Managing Director Kevin Webb said the new equipment would enable the company to modernise one of its production lines and start moving towards best practice manufacturing.
“It means we can upgrade the high volume line that processes our sauces, honey, jams and relishes,” Webb said.
“The new equipment will mean fewer stoppages, less waste, reduced down-time and greater efficiency, which is crucial in reducing costs. It will also enable us to expand our product range.
“It’s a major step in ensuring Spring Gully survives and prospers.”
Spring Gully Foods is a fourth-generation family business established in 1946 in Rostrevor. The company supplies Spring Gully, Leabrook Farms and Gardener Range brands including pickles, sauces and honeys.
After its resurgence earlier this year, 300 creditors approved a Deed of Company Arrangement that released the company from administration on the promise debts would be repaid in full.
All creditors would receive an initial down payment and a promise of regular quarterly payments until the debt is finalised, estimated to be in three years.
Two weeks ago the company paid 20 cents in the dollar to creditors, reducing its debt by $1 million.
The company said further payments of eight cents in the dollar will be made every quarter.
