Simplot To Close Hermiston, OR, Plant

Announcement was made Friday by the J.R. Simplot Co., that it will permanently close its Hermiston, OR, potato processing plant in a phased shutdown over the next nine months.

The closure has been blamed on the flat-to-declining demand for frozen potato product, both domestically and globally.

James Munyon, group president, said the absence of market growth projected over the next several years has created industry-wide overcapacity.

"The closure of Hermiston, while an extremely difficult decision, will enable us to operate our other plants at higher capacity, thus more efficiently, and further strengthen our compeititive position," said Munyon.

One of the plant's processing lines will be shut down at the conclusion of the 2003 potato crop year in June. At that time the entire plant will go through a scheduled shutdown. The plant and related support operations employ about 625 people. Closing the processing line will lay off 125 permanent employees.

In July the facility's remaining processing lines will resume operation. Based on market consideration and the availability of the plant's workforce, those lines will remain in production until late November. The final job eleminations, totaling about 500 employees, will occur at that time.

Munyon said the processing of products at Hermiston will be transferred to other plants within the Simplot system. The company also has operations at Othello and Moses Lake, WA, Caldwell, Nampa and Aberdeen, ID; Grand Forks, ND, and Portage La Prairie, Manitoba, Can.

Munyon emphasized that the closure is not a reflection on the Hermiston plant work force or the grower base.

"We greatly appreciate the efforts of both our employees and growers," he said. "Challenges in the industry and the marketplace dictate that we take this action to remain competitive."

Munyon said that although fewer potatoes will be needed at Hermiston from the 2004 crop, no reduction in volumes contracted with growers will be made this year. The potatoes not processed at Hermiston will be used at other processing plants.

He said the number of contract growers and acreage will decline for the 2005 crop year, but the precise impact cannot be determined at this time.