THE closure of frozen food giant McCain Foods' operations in George means about 650 Southern Cape farm labourers and factory workers will have to seek other employment by October.
As many as 45 vegetable producers in the Southern Cape have contracts with McCain and will be severely impacted by the closure, according to farmers' union Agri Western Cape.
The factory has received about 15000 tons of raw product for the year up to June 30.
Economists yesterday labelled the move "devastating" for the region, not only because the Southern Cape is losing an international brand, but because the 500 farm labourers are largely unskilled and will not be able to be employed in other sectors.
The Food and Allied Workers' Union (Fawu) has condemned the company's action.
McCain managing director Louis Wolthers announced that the company would be centralising its operations at its Springs factory, because the availability of cheaper products from China and Western Europe had put massive pressure on its operations in the Southern Cape.
McCain operates two vegetable processing plants in South Africa, one in Springs and one in George, with both plants operating below capacity.
"Various measures have been taken to reduce overhead costs, including the downsizing of the George plant in 2005, which regrettably failed to achieve the desired results," Wolthers said.
"An investigation into the commercial viability of the George plant ... earlier this year ... indicated the majority of crops being processed at the George plant could also be procured in the northern provinces and therefore processed at the Springs plant at competitive costs."
He said consultative processes were still under way, but it was envisaged the George factory – which processes sweet corn, broccoli and carrots – would be closed by October, following the processing of the carrot crop.
"This will regrettably result in all existing permanent positions  and all seasonal positions  at the George plant becoming redundant. Various alternatives to redundancy have been investigated ... but all have been rejected as they will not materially assist in reducing costs and capacity utilisation."
Agri Western Cape spokesman Portia Adams said yesterday: "The losses [for] farmers ... will be great. McCain was central to the economy of that region in respect of creating employment."
Fawu spokeswoman Dominique Swart slammed McCain for not looking at all possible options to save the factory. "We are meeting with them [today], but at this stage it does not look like correct procedures were followed."