The Australian arm of US-based food group Simplot has warned two factories could close, putting around 325 jobs at risk.

Simplot Australia said today (5 June) it has advised employees at plants in New South Wales and Tasmania the sites, which produce frozen and canned vegetables, are under the threat of closure.

The company cited “unsatisfactory” financial returns arising from a “very competitive” food industry environment and “unsustainably high costs” from manufacturing in Australia, for the planned closures.

Simplot said the plants in Bathurst and Devonport are not competitive in the face of lower cost imports. The high Australian dollar has also exacerbated the issue.

However, Simplot Australia MD, Terry O’Brien, said: “The frozen and canned vegetable categories have been chronic profit under-performers for years, regardless of the value of the Australian dollar.”

O’Brien said Simplot would meet government representatives, employees, unions, suppliers and growers to discuss how to improve the financial performance of the plants.

However, he added: “If insufficient opportunities are identified, we will be forced to close our Bathurst plant after the next corn season. Our Devonport plant will be required to produce a five-year improvement plan with satisfactory outcomes or face the prospect of a longer-term – three- to five-year closure.”

Simplot supplies Coles with private-label products and produces under brands including Chiko, Birdseye, Lean Cuisine and John West.