* Simplot crunches the numbers on its future

* Cost of wages is killing Simplot, producer says 

MORE than 100 jobs will be lost as operations at Simplot's Bathurst plant are dramatically downsized, under plans announced this morning.

Staff met for early morning meetings where they were told production the Bathurst plant would be pared back to only frozen and canned corn products, and Chiko rolls.

Management also announced its plan to retain Simplot's plant at Devonport, Tasmania but said a significantly lower ongoing cost base was needed to ensure both plants remain operational beyond the next three to five years.

Simplot Australia managing director Terry O'Brien said the company had been forced into a difficult financial position.

"Simplot Australia's parent company, US-based JR Simplot, has committed significant financial investment but it has done so only if the operations can be shown to be viable into the future. In the absence of a lower cost structure, neither plant has a strong business case long-term," Mr O'Brien said.

An announcement from Simplot this morning said the company planned to gradually pare back operations at Bathurst, resulting in a reduction of about 110 permanent positions.

Mr O'Brien said if Bathurst remains financially sound on this basis, it will continue until further notice.

"However, if costs escalate or other aspects do not prove financially viable, a total closure would then be necessary," he said.

"For Devonport to remain operational past the three years mark, it requires considerable capital investment and labour cost reduction."