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Cheaper imports hits potato industry

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Limestone Coast of SA produces more potatoes than regions

supporting Victoria and Tasmania McCain processing plants.

5THE FM newsonline wattlerangenow

McCain Foods announcement to close their potato processing plant at Penola in December 2013, will put 59 employees out of work. McCain Foods Regional President Australia/New Zealand and South Africa (ANZSA), Mr Louis Wolthers said continuously rising input costs, such as labour and electricity, and high raw material costs coupled with a surplus capacity, contributed to the closure decision. Mr Wolthers said imports of cheaper processed potatoes have risen from 10,000 tonnes in 2002 to a decade-high of 130,000 tonnes at the end of 2012.

“At the same time, Australia has one of the highest raw material costs in the world, which is unsustainable in the long term,”

“Cheaper potato imports are seriously threatening the future of the processing industry in Australia, and will place further cost pressures on Australia’s growers”.

“Major food industry companies in Australia would welcome any Federal and State Government support to address the structural issues in order for the potato industry to be more competitive.”

“This step is not a reflection on the performance of the workforce, but is influenced by the rising costs of manufacturing in Australia,”he said.

McCain Foods acquired the Safries plant in 1992, which was built around 1986.

The majority of potatoes from Penola are processed in Ballarat, and are sold in Queensland and New South Wales.

Mr Wolthers said the company has many loyal employees who have worked very hard over the years.

“They can feel proud of the work they have done, and I thank them for their contribution”.

“The Penola employees will be paid all their legal entitlements, and offered counselling and support to find new jobs,” he said.

A total of 59 permanent employees will be offered redundancy packages, which will be in line with the company’s EBA and employment contracts.

Mr. Wolthers said McCain Foods has been in Australia since 1976, and is committed to continuing its operations in Victoria, Tasmania, and New South Wales, where the company recently acquired Sara Lee.

McCain Foods will continue to process potatoes at plants in Smithton, Tasmania and Ballarat, in Victoria.

McCain Foods specializes in frozen potato products, vegetables, dinners, pizza and frozen fruit for both the retail and Foodservice sectors. The company employs 1390 people across eight production facilities, which are located on six sites throughout Australia and New Zealand.

Robbie Davis CEO of Potatoes South Australia Inc the peak industry body, stated that this closure announcement was sudden and without warning,. In fact, the Limestone Coast of South Australia, where the Safries/McCains processing plant is situated, produces more potatoes than the regions supporting Smithton, Tasmania and Ballarat, Victoria where the other southern Australian McCain processing plants are located.

“The producers of processing potatoes are unsure of their long-term future. It is very disappointing for the employees of McCains and their families, and the producers and their employees. The uncertainty in the industry is unprecedented,” she added.

The South Australian industry is liaising with the Government at both state and federal levels

Source: McCains Foods and Potatoes South Australia

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