BURLEY, Idaho — McCain Foods has indefinitely postponed plans announced last summer to invest roughly $100 million in a new facility that would house a third french fry production line at its Burley-area potato processing complex.
Doug Manning, Burley’s economic development director, is encouraged, nonetheless, that the New Brunswick, Canada-based company has commenced with a $40 million upgrade of an existing line in plant No. 2 of the same campus.
McCain initially planned to start building a third line this summer and hoped to complete the project by the end of 2015.
“The expansion announcement was made based on anticipated increased demand for potato products, both domestically and internationally,” McCain spokeswoman Calla Farn said in an email. “Domestically, that has not occurred, and we have put the project on hold. While we cannot predict the future, I can tell you we are 100 percent committed to growing our potato business in North America.”
Manning remains hopeful that progress toward adding a third line locally will resume next spring. He said the new plant would be highly automated and staffed by 100-130 employees.
McCain employs more than 500 local workers. Manning said another community in Washington had been courting McCain to relocate before the company chose to reinvest in the Burley area.
“We really worked hard to get them to stay here, to show them we had great faith in their company,” Manning said. “I still think it’s an excellent future for McCain here in Burley.”
The company’s local facilities are located a little more than a mile outside of Burley city limits in Cassia County. City staff had offered to assist the county by extending the borders of an urban renewal zone to incorporate the planned third line.
Expanding the urban renewal zone would make the project eligible for benefits through tax increment financing, a tool enabling businesses to use some of their own property tax dollars to build infrastructure supporting new development.
Cassia County Administrator Kerry McMurray said work to broaden the TIF district ceased when McCain postponed its development plans.
“We appreciate McCain. … We’re hopeful that things will keep moving forward,” McMurray said.
John Toaspern, chief marketing officer with U.S. Potato Board, said fry sales are tough to track since a few companies control sales and keep data confidential. He’s optimistic about growth in foreign fry markets such as Korea, Indonesia and Japan but acknowledged, “We know overall that domestic demand for fries certainly hasn’t been growing in the last couple of years.”
Declo, Idaho, potato farmer Mark Darrington, who raises potatoes for McCain and serves as president of Southern Idaho Potato Cooperative, said competing potato processors have increased fry production capacity in the Northwest recently, with ConAgra Foods opening a new Washington plant and J.R. Simplot opening a modern plant in Caldwell, Idaho.
“Of course I was disappointed when I heard the nw plant was going to be put aside for an undetermined amount of time, but I’m very pleased with the ($40 million upgrade),” Darrington said.