Location: Ulverstone, Tasmania
Population: 22,760 (Central Coast LGA, 2021 Census)
The fertile lands surrounding Ulverstone in north-west Tasmania have made it a hub for agriculture and food manufacturing. One major food manufacturing business with prominent brands in the Australian market has a large frozen potato facility in Ulverstone, which is a major employer and economic growth driver in the regions. This facility produces coated, uncoated and value-added potato products, employing 320 people across eight automated pack lines. Its supply of 300,000 tonnes of potatoes each year comes from 165 local growers.
In recent years the facility has undergone significant upgrades to improve its output capacity and productivity while at the same time reducing energy use and emissions. This has improved the plant’s long-term viability and provided security to employees and growers. The facility upgrades have been funded in part through innovation and clean technology grants from the Commonwealth and Tasmanian Governments.
OPPORTUNITY IDENTIFIED
Potato processing is an energy-intensive activity that can involve washing, cutting, coating, cooking, processing and packing. It requires boilers and steam as well as sufficient energy to power automated heavy machinery, conveyor belt lines and others. Prior to 2012, the Ulverstone facility was powered by an onsite coal-fired generator and the company was among the largest coal users in Tasmania.
Two significant facility upgrades in 2012 and 2018 have radically improved its energy use, efficiency, and productivity. In 2012 a highly efficient natural gas co-generation plant was installed to supply electricity and steam, resulting in a halving of carbon emissions. In 2018, the facility had a heat exchanger installed which recovers heat from the refrigeration system and uses it to pre-heat boiler feedwater. Also included in this later upgrade was an increase in storage and refrigeration facilities to store 165 tonnes of potatoes.
Economically, the Ulverstone facility investments made sense due to rising energy prices and the significant cost reductions that would be achieved, making the operations more productive and the business more competitive. Greater energy efficiency directly impacts the bottom line and the cost of energy can be the single largest uncontrolled expense for large manufacturing businesses.
Environmentally the shift from coal would be of significant benefit in reducing Tasmania’s emissions and also beneficial in terms of air quality. Eventually, onsite high output electricity generation and battery technology will likely improve to the point of displacing natural gas in most applications, however the almost halving in emissions from coal to gas demonstrates the value of gas as a transition energy source.
There were also pragmatic considerations in terms of the security of ongoing supply of coal in Tasmania from the Cornwall Coal mine at Cullenswood. Cornwall Coal has an application pending with the Commonwealth Government for a new mine that would operate until 2026-2027.
COLLABORATION INITIATED
The company has been successful in securing grants from the Commonwealth and Tasmanian Governments for upgrades. As a major employer in the region in its own right and the major buyer of produce from 165 local farmers, the company is important for the future of the north-west region of Tasmania. The 2012 upgrade received a $3m Australian Government grant with the company contributing $13m for a total project cost of $16m. The Tasmanian Government also took the opportunity to invest $2m to expand the new natural gas pipeline that was built as part of the project, so that it could accommodate the future needs of the Ulverstone community and not only the factory. The 2018 upgrade was supported by a $12m Australian Government grant with the company investing $39.3m for a total project cost of $51.3m. The local economic benefits over ten years were calculated at $164m.
THE BIGGER PICTURE
The food manufacturing industry in Australia is worth more than $133bn and employs 273,000 people, with 40% of those in regions. Large-scale food manufacturing is necessarily energy intensive to produce food at such a scale and rate of output to feed Australia’s growing population. Companies that can pair large scale output with high product healthiness play a vital role in our society. But all companies no matter their scale and contribution need to play their part in the transition to net zero emissions.
Examples such as the Ulverstone facility show what is possible in terms of upgrading existing manufacturing plants using the latest energy technology and innovation to maximise efficiency and productivity. It will be important for all food manufacturing operations to adopt similar approaches in the coming years as current facilities using old technology reach their end of life and require upgrading or replacement. Recent Commonwealth Government commitments such as the $15bn National Reconstruction Fund could be an important vehicle for businesses to invest in low emissions technologies that in aggregate will make a very significant contribution to net zero.
This case study is an excerpt from the Towards Net Zero: Transition Pathways for Regional Australia report, which was released in March 2024 under the Intergovernmental Shared Inquiry Program.
The report was funded by the Australian Government through the Department of Infrastructure, Transport and Regional Development, Communications and the Arts; the Victorian Government Department of Jobs, Skills, Industry and Regions; the South Australian Government Department of Primary Industries and Regions; the Western Australian Government Department of Primary Industries and Regional Development; and the Queensland Government Department of Regional Development, Manufacturing and Water.