Gas price hits Australian food firm

Simplot, Australia's largest vegetable processor, is facing a A$4 million hit as a result of an increase in gas prices.

The company had installed a gas-fired cogeneration plant at one of their largest processing facilities in north-west Tasmania to avoid being hit by large fluctuations in energy prices.
Simplot Australia
However ABC Online reports that Managing director Terry O'Brien said now the gas price is having a negative impact on the company.

"Our estimates, based on the forward projections and what we've locked in already, is a cost increase of 60 per cent over three years," he said. "That hits us for an incremental $4 million of cost in Tasmania.

"That's around about 5 per cent of our total Simplot Australia profits, so it's quite substantial."

The vegetable processor has made significant moves towards cost saving over the last few years.

"I can't see it being absorbed by the business; we are scraping the barrel now for cost savings," Mr O'Brien said.

“Ultimately, we've got no control over the price of gas," he added. "It's totally non-tradeable for us. We can't go somewhere else for this stuff, so we are captive.”

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...