Study favours new King Island abattoir

King Island could support a new and profitable abattoir, according to a new feasibility study.

Last year, JBS Australia closed its processing plant on the Tasmanian island because the cost of freight and electricity was too high.

Author of the study and director of consulting firm Felix Domus, Paul Troja, says the new facility would cost $30 million.

He says 75 per cent of farmers on the island would have to commit to supplying animals for it to be viable.

"If it is competitive, farmers will want to sell their product to these people," he said.

"There's no free kicks in business, it's very, very cutthroat, so this enterprise that we're trying to develop on King Island has to be competitive."

The Bass Strait island, with a population of about 1,500, also lost about 100 full-time jobs, which has seen families leave the island in search of work.

A new abattoir would mean a possible 90 new jobs.

If the project gains enough support from producers, a business plan will be commissioned and producers will start the search for an investor.

The state government has ruled out investing in the project.

The study was funded by a partnership agreement between King Island Council and the Tasmanian State Government.

Source: ABC Rural, 19 June 2013