McCain Foods has announced plans to invest in a plant in Australia, building a new packing line and upgrading storage.
The Canada-based frozen foods group said over the next two years it would spend up to A$10m at the facility in Smithton in northern Tasmania.
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John Jackson, agriculture director for McCain's business in Australia and New Zealand, said the investment will increase efficiencies and make the plant more sustainable.
"While this added investment will increase the plant’s capability and efficiencies, we still have a number of challenges before us in maintaining the competitiveness of the plant to ensure its long term survival," he said.
"One of the challenges, in such a competitive market, is maintaining and increasing efficiencies to drive cost-reduction. Even in northern Tasmania, we have to realise that we are competing in a global commodities market.
"In addition, rising local water and energy costs impact on the plant’s cost base reducing its overall profitability against global competitors."
Jackson added the new packing line would add "increased packing capability of retail product for the Australian market".
The improved storage facility will hold up to 55,000 tonnes of potato for processing.
