McCain Foods Australia/New Zealand will spend up to $10 million dollars over the next two years upgrading onsite storage facilities and building a new packing line at the Smithton plant in Circular Head, Northern Tasmania.

Ironically the announcement comes less than two years after previous statements by McCain Foods and its competitor Simplot that Australian potato processing was becoming uncompetitive. The big change of heart appears to reflect the big drop, by about 30 per cent, in the value of the Australian dollar since 2013. In 2013, the Australian mining export boom – particularly with coal and iron exports destined for the China market – was at its peak. The potato processing industry illustrates that the Australian manufacturing sector may actually be competitive – except when Australian mineral exports are in price boom mode. The Australian Federal government bureaucrats in Canberra have not adjusted government thinking or policy settings to this reality.

McCain Foods will spend an estimated $7.9 million on improving on-site storage over two years and $1.6 million on the new packing line. The improved storage facility will hold up to 55,000 tonnes of potato for processing.

McCain Foods Australia/New Zealand Agriculture Director John Jackson said the aim of investment was to increase efficiencies and make the plant more sustainable.

“While this added investment will increase the plant’s capability and efficiencies, we still have a number of challenges before us in maintaining the competitiveness of the plant to ensure its long term survival,” he said.

“One of the challenges, in such a competitive market, is maintaining and increasing efficiencies to drive cost-reduction. Even in Northern Tasmania, we have to realise that we are competing in a global commodities market.

“In addition, rising local water and energy costs impact on the plant’s cost base reducing its overall profitability against global competitors.”

The Smithton plant processes potatoes for french fries and potato products for the local and interstate markets.

McCain Foods is a global group based in Canada and currently operates five production facilities across Australia and New Zealand. These include sites at Lisarow, in New South Wales, Ballarat, in Victoria, Smithton, in Tasmania, Hastings and Timaru in New Zealand.

Recent new product launches

McCain Foods have recently launched a number of new products in Australia, such as :

• Limited-edition ‘Samosa’ and ‘Chorizo and Caramelised Onion’ flavoured potato wedges, launched in June 2015.
• Healthy Choice Wholegrains range, launched in April 2015

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