McCain Foods has announced that 59 jobs will be lost following the closure of its South Australian Penola potato processing plant.
Louis Wolthers, McCain Foods regional president for Australia/ New Zealand and South Africa said that the decision was made due to unsustainably high input costs coupled with surplus capacity, ABC News reports.
“Australia has one of the highest raw material costs in the world, which is unsustainable in the long term," said Wolthers.
"Cheaper potato imports are seriously threatening the future of the processing industry in Australia, and will place further cost pressures on Australia's growers".
Wolthers said that cheap imports of processed potatoes have risen from 10,000 tonnes to 130000 tonnes within the ten year period between 2002 and 2012.
McCain have said that 59 permanent employees will be offered redundancy packages together with counseling and support.
Peter Gandolfi, Wattle Range Mayor said that the closure of the plant is upsetting both for the local community and for the nation as a whole.
“I think it's further evidence that as a nation, manufacturing is becoming more and more uncompetitive," he said.
"It's pretty sad when we can't compete when it comes to growing our food."