US food and agribusiness company J.R. Simplot has said it is to permanently close its Hermiston, Oregon potato processing plant in a phased shutdown during the next nine months.

The company said the closure is a result of flat-to-declining demand for frozen potato products in both domestic and global markets served by the Hermiston facility. The plant and related support operations at Hermiston employ around 625 people.

James Munyon, Simplot Food group president, said the absence of market growth at the moment and projected over the next several years, has created industry-wide overcapacity. Munyon added that the closure would enable the company to operate its other plants at higher capacity, and therefore more efficiently.

One of the plant’s processing lines will be permanently shut down at the conclusion of processing the 2003 potato crop in June, when the entire plant will experience a scheduled shutdown. The closure of that line will result in approximately 125 permanent layoffs.

In July, the facility’s remaining processing lines will resume operation. Based on market considerations and the availability of the plant’s workforce, those lines will remain in production until late November. The final job cuts, which will number around 500, will occur at that time, Simplot said.

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