Simplot-Australia will shut down one factory and the upgrade of another factory will keep the company more economically sound.
The Scottsdale factory will be shut down after 60 years of operation. The site will become a bulk-receiving site for potatoes from the north and northeast of Tasmania. The move will cost 110 jobs.
But Simplot spent A$30 million to install a second french fry processing line at its Ulverstone plant in Tasmania, creating 24 permanent jobs.
Terry O'Brien, managing director, said the consolidation was necessary because the older Scottsdale chip line, built in the 1940s, did not offer the cost efficiencies of the purpose-built Ulverstone factory.
O'Brien said the net benefit to Tasmania of Simplot's A$30 million investment in Ulverstone was a more secure future for potato production and significant underpinning of the state's overall economy. At the same time it is a step toward a much-needed lift in profitability for Simplot's french fry operations.
New Zealand is a low-cost importer, causing the efficiencies of the older plant to be reviewed to cap escalating costs and competitive positioning.