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Simplot presents plan to save facilities; Bathurst council to consider financial assistance for the company

August 22, 2013 • News

Forecasts for Australia’s vegetable business suggest that the prospects for the market are only going to get worse, says Simplot’s Managing Director Terry O’ Brien in a report on ABC News.

Image credit: ABC News

Image credit: ABC News

In June the vegetable processor announced that its Bathurst and Devonport facilities are facing the threat of closure because operations are not generating profit, painting a picture of an Australian vegetable industry in decline.

As the September Federal Elections draw near, the problems of the vegetable industry are fast catching the attention of the candidates.

“Essentially it revolves around the fact that the vegetable business in Australia has been a chronic underperformer for some time,” says Mr. O’Brien.

“And the way the market is running at the moment, and our reading of the prospects of the market for quite some time to come, suggest that it’s not going to get better. If anything, it’s going to get worse.”

In July, Federal Minister for Agriculture Joel Fitzgibbon met with Simplot representatives and vegetable growers to discuss the future of the vegetable processor, where it was suggested that government funding could improve productivity.

The proposal from Simplot and the growers’ group focused on five major areas: business structure and planning, productivity, energy, export markets and red-tape and regulation.

Andrew Craigie, Chair of the Simplot growers’ group believes that the plan is a sustainable solution.

However, Minister Fitzgibbon has not yet committed any funding to the company, although he said he’ll explore possible funding options for Simplot through the National Food Plan.

“You don’t want the government running the sector, you want the private sector running your agriculture and innovating and lifting productivity and feeding Australians,” Mr. Fitzgibbon said.

Moving forward the Minister said Asian export markets could be the big break for Australian produce.

“We are now facing a dining boom,” he said. “We have the opportunity to feed Asia – that’s a big opportunity for Australia.”

Mr. Craigie says he has yet to receive a response to their proposal but cannot see any evidence pointing to an answer in any of Labor’s agricultural policy platform for the Federal Election.

“We haven’t actually heard anything we can directly relate back to the discussions we’ve had as of yet,” he said.

“But Mr Fitzgibbon did say he didn’t want Simplot or any other food processor to close on his watch, so we’ll see what happens.”

Meanwhile Bathurst Mayor Monica Morse announced today that the council will begin discussions with the local Simplot plant about providing it with possible assistance.

According to ABC News the plant recently received $500,000 from the federal government to upgrade its refrigeration systems, and the state government has offered payroll tax rebates.

Ms. Morse says Simplot is already having discussions with their Australian board in Melbourne and further talks will take place with the US board to see whether the steps that have already been taken are enough to secure the future of the Bathurst plant.

“We’re going to have immediate discussions with them here to see if there’s anything and what extent that we can help them from council’s point of view,” Ms. Morse said.

“It is felt by all of the councillors we need to support Simplot and hopefully keep that business operating in Bathurst.

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