Simplot to close Idaho processing plants
J.R. Simplot Co. announced that it will be closing three aging potato processing plants in Nampa, Aberdeen and Caldwell, Idaho, in the next two to three years upon completion of a new plant in Caldwell, Idaho.
The plant will be a 380,000 square-foot facility built on the site of the company's original processing plant in Caldwell. Site preparation is anticipated to begin in May 2012 and the start-up expected by spring of 2014.
"Competition in the food industry has become challenging, with profit margins shrinking and costs continuing to rise," said Bill Whitacre, Simplot CEO, in a press release.
The new plant will employ about 250 people, according to the press release, resulting in job losses of about 800 with the closure of the processing plants in Aberdeen, Nampa and Simplot's original plant in Caldwell.
"The new plant will produce the same output as the three older plants and will allow us to remain competitive in the marketplace," said Mark McKellar, Simplot Food Group president.
McKellar said that renovating the three plants would cost as much as building the new plant and renovation would have provided fewer long-term, sustainable production gains.
"Unfortunately, our current Idaho plants lack the flexibility, processing capability and energy efficiency that we need to be sustainable," McKellar said in the release.
The new plant will have a smaller carbon footprint, use considerably less water and be more energy efficient.
"The Caldwell location affords excellent access to rail and road transportation, water raw potatoes and other inputs, and the skilled labor force that will be necessary to operate and maintain such an advanced facility," McKellar said.
The original Caldwell plant site was chosen by J.R. Simplot as a dehydrating operation in 1941 and subsequently expanded into potato processing in the early 1950s.