THE fallout following an announcement Grain Products Australia in Tamworth has entered into voluntary administration continued yesterday.
Tamworth mayor Col Murray was saddened by news of the company’s financial difficulty.
“I guess when you put all of the cost imposts faced by companies like Grain Products into one basket they add up and end up tipping the balance between what’s financially viable and what isn’t,” he said.
“It really is an incredible shame to see a business that provides so much employment and flow-on benefit to the city to be in this sort of situation, especially when what they do is so specialised and is really based around some incredible innovation in their field.”
Cr Murray said he believed the company’s problems are a perfect example of the problems a number of companies were facing as a result of growing operational costs.
“In the quest to create this perfect world where there is a balance between business and the environment, the cold hard reality in the light of day is that there may not be a perfect balance,” he said.
“This situation is probably an example of that and I believe we need to probably lower our expectations in terms of what’s reasonable and financially viable and what’s good for the environment. In the end if there are no jobs, and no food we’re really not left with much, are we.”
Cr Murray said while he was not aware of any other local businesses in similar strife he said he knew there was strain on businesses, large and small, who relied on exports.
As an oats exporter himself, Cr Murray said he too had been feeling some pressures of rising costs. “Grain Products’ situation is definitely not a stand alone one. Manufacturing Australia-wide seems to be doing it tough and we are almost in a situation in our city where we have proven more resilient than most to this point,” he said.
Cr Murray briefly touched on what the flow-on effect could be if a solution wasn’t found.
“So many local businesses are reliant on the factory for work,” he said.
“Everything from plumbers, to electricians and transport companies.”
Tamworth Business Chamber president Tim Coates agreed.
He said the potential flow-on effects would be felt heavily by a number of local businesses but also the wider community. He said overall the management team of the company should be congratulated.
“In 2009 the then Penfords faced a similar situation and the management team was able to find a way forward by creating Grain Products,” Mr Coates said.
“It appears the factors of the recent past, like electricity and wheat prices have effected the company’s ability to trade and the impact of that is serious.”
Mr Coates said the direct impact of 68 jobs hanging in the balance was bad enough but it would impact a number of other local businesses that supply services to the factory on Marius St if a solution couldn’t be found.
“Everything from local companies who supply technology to transport companies could feel some impact,” he said.
“Another impact, one that many people will not have considered is the flow-on to the wider community.
“Grain Products, like many other local businesses, contributes heavily as a good corporate citizen, sponsoring events and community groups.
“If the business can’t find a way forward those people will miss out too.