Labour pressures hurting processor

The worsening labour shortage crisis in the food processing industry could be the ultimate hurdle to Craig Mostyn Group's new $50 million abattoir in the Linley Valley.

"We have a new beef and sheep plant in the pipeline for which we need to set up a new abattoir...whilst we can find the money, we won't do it unless we can run it and I know we won't get the 100 staff we need locally," Craig Mostyn Group chief executive David Lock said.

The labour shortage has plagued the food processing industry in recent years, putting pressure on the industry's viability and hampering growth.

To make matters worse, the federal government's scrapping of the Food Innovation Grant has left on hold an application from Craig Mostyn to develop machinery that would compensate for the labour of two workers, the H Bone Splitter.

"The machine is not replacing existing people, those are jobs that we can't fill with existing people," Mr Lock said.

He said the robotics technology was designed and specified, and was just waiting to be deployed.

According to Mr Lock, the plant was going to set an example for other businesses and showcase the technology, which could be shared amongst the industry.

Labour cost pressures have also continued, with the government announcing a $2,000 per year salary increase for employees on a 457 visa late last month.

The minimum salary increase, from $41,850 to $43,440, was considered too high across the board in the food industry, which often lacked semi-skilled workers.

Mr Lock says he already has 30 workers on the 457 visa in the meat processing side of the business.

"We're committed to pay imported labour as much as local labour and the minimum wage [for staff on the 457 visa] is a lot higher than what the local labour is paid," he said.

The shortage of 30 staff in the meat processing side of the business has forced the company to place its current staff at the start of the processing chain and export the carcasses to Singapore where it is packed and consumed.

"It takes revenue out of the state, we export raw material instead of doing further work to it," Mr Lock told WA Business News.