Vegetable processor Simplot has announced that its Tasmanian Devonport plant will remain in operation for at least another three years to fulfil its contracts with both Coles and Woolworths.
The company did however state that the plant will need to make significant savings or it will potentially face closure by 2019, and that the processor’s casual workforce will experience significant job cuts, The Mercury Reports.
The Tasmanian state government granted Simplot $500,000 this morning for capital upgrades and in addition, the company’s managing director, Terry O’Brien will be meeting with new primary minister Ian McFarlane to discuss a further $18m in funding that was promised by the Rudd government.
Andrew Craigie, vegetable council chairman for the Tasmanian Farmers and Graziers Association said that although three years was a reasonable timeframe, a five year term would have been preferable as it would have given growers more confidence to invest in more efficient technology.
"But by no means will discussions with Simplot drop off," said Craigie.
"The best analogy I can come up with is that we have been told we have a terminal disease but there is a treatment.
"That treatment could kill — but if we refuse, we could also be goners."
Simplot announced earlier this year that two of its plants, Devonport and Bathurst, were under threat of closure due to a very competitive industry and unsustainably high costs.