A BRIGHT spark has emerged on Australia's often-stormy food processing horizon, with Japanese-owned tomato processor Kagome spending $21 million to expand its operations on the Victoria-NSW border.
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While at nearby Shepparton the embattled fruit canning group SPC Ardmona has blamed cheap imports and the high dollar for its commercial woes, the bulk paste and diced tomato plant at Echuca is capitalising on a growing export market in Asia.
Kagome exports 25 per cent of its production to India, Thailand and Japan.
Kagome Australia's chief executive John Brady estimates the plant could replace 7000 tonnes of imported tomato paste, valued at $6.5m, with local output.
The expansion will include diversifying into carrot concentrate production line and pouch packaging facilities.
The Echuca plant processes more than 250,000 tonnes of raw product annually and employs up to 300 staff during peak season (January to April).
The expanded, more efficient facility will add 20 jobs to Kagome's current full-time payroll of 45.
Since entering the Australian market in 2010 when it bought one of the last tomato processors, Cedenco, the Kagome company has diversified its domestic supply base and began exporting in 2012.
The company has 2500 hectares of its own land in northern Victoria used to grow about half its raw product needs, with the rest sourced from contractors.
Kagome expects to produce 15,000t of diced tomato and 30,000t of paste annually, depending on demand.
A new wastewater treatment plant will be built to handle to 1.3 megalitres of waste water the plant generates from processing tomatoes each day during harvest.
Mr Brady said the new pouch making facility would improve the company's product range.
"We will be able to deliver a product size down to a kilogram.
"The smallest we sell at the moment is 220kg packs. The largest is 1.5 tonne."
Domestic product sells to food processors Simplot, SPC Ardmona, General Mills, Green Foods, Unilever and Campbell's.
Mr Brady said there was potential for "enormous growth" in Asian consumption of processed tomatoes.
"India grew 18 million tonnes of tomatoes in 2013 and less than one per cent was processed."
The addition of carrots is a counter-seasonal play, allowing Kagome to produce a concentrate product for export in winter and utilise the facility when tomatoes are out of season.
Kagome will manage about 80 hectares of its own carrot crops this winter, with an eye to sales of concentrate product into Asia and India.
The company will look to further diversify winter production, with Mr Brady citing beetroot, apple and pear processing options as being under consideration.
"We can play a strategic role in supplying northern hemisphere - Japan, Europe or even the United States," he said.
Industry peak lobby body Ausveg wants to see Kagome's expansion result in "long-term contracts being placed with Australian vegetable and tomato growers."
Spokesman Luke Raggatt said Ausveg believed the time was ripe for "heavy investment" in research and development and export opportunities.
It ran a reverse trade mission in 2013, taking buyers and supply chain representatives from Asian countries including China, Malaysia and Indonesia to Australia to meet with vegetable growers and took them to growing and processing operations.
They were most interested in leafy Asian greens, celery and carrots, he said.
Contract supplier, Bruce Weeks, Rochester, Victoria, said prices had been tough for growers during the past few seasons, but he hoped for a flow-on effect this year as the lower Australian dollar made exports more attractive to overseas buyers.
Mike Foley
Senior journalist for The Land.
Senior journalist for The Land.
