Devastated

Scottsdale residents were shocked by the news, described by Dorset Mayor Yvonne Thorne as "devastating".

There were tears of frustration from employees who were given 15 months' notice at a meeting with company executives yesterday.

Simplot plans to invest $30 million to upgrade its Ulverstone plant, creating 24 new jobs.

Operations director Mark McKellar said competition from New Zealand and increasing costs - including a $30-a-tonne pay increase won by farmers last year - had forced the decision.

Mr McKellar said the Ulverstone plant, built in 1992, had enough room for a second processing line, and it would be uneconomical to upgrade the Scottsdale factory.

The Dorset Council and unions reacted angrily, claiming that they had been left in the dark over the decision.

The council released a report just three days ago outlining the benefits of the factory to the region, in a bid to persuade the company to stay, following months of rumours and uncertainty about the factory.

General manager Greg Preece said that two years ago the company invested several million dollars to install a new battered product line at Scottsdale.

The council had spent $1 million just last year on a waste water treatment plant to be used primarily by Simplot.

"We felt that with these developments there was a certain degree of certainty," Mr Preece said.

The community would lose about $6 million in wages with a flow-on of as much as $15 million.

Australian Manufacturing Workers Union delegate John Henderson said employees found it difficult to believe the news yesterday.

"There are a lot of unhappy people in there - they don't know where they are going to get work from now on," Mr Henderson said.

REACTION - Pages 4-5

FACTORY A TOWN ICON FOR 60 YEARS - Page 5