KEY POINTS:
New Zealand's biggest meat exporter PPCS plans to close two plants as part of a restructuring process.
Sixty jobs will be lost if the closures go ahead.
The farmer co-operative last week posted a net loss for the year ending August of $40.3 million and said it would adjust its processing capacity to better match the supply of livestock.
Chief executive Keith Cooper said a consultation process had begun at PPCS's Te Kauwhata venison processing plant and Balclutha-based Windward operation which makes lambskin products.
"These proposed closures are the first phase of the company's right-sizing programme to align the company's processing capacity to the current livestock profile and to exit non-core businesses," Cooper said.
The company planned to return to more traditional profit levels - of between $20 million and $30 million - in the next two years.
"We emphasise that these proposed closures are no reflection on the commitment and skill of our people working at these plants."
A decision was expected within two weeks.
Plant closure at Te Kauwhata would affect 35 people, while the Windward operation employed 11 people at a tannery co-located at the firm's Finegand facility and 14 staff at the Balclutha finishing factory.
Processing lambskins into finished products was no longer economic, with low-cost competition from abroad and a global drop in revenue from such products, Cooper said.
"The continued strength of the New Zealand dollar, ongoing compliance costs, and the significant costs involved in ensuring we continue to meet the highest environmental standards for effluent discharge make continuation of New Zealand-based manufacturing of finished lambskins untenable," he said.
The number of deer available for processing was expected to drop by more than a third during the next four years, while new processing operators had sought to capitalise on an improvement in venison returns, Cooper said.
"As a farmer-owned co-operative, PPCS maintains processing and marketing infrastructure for the benefit of its farmer-suppliers.
"Processing facilities such as Te Kauwhata are not viable where farmers elect not to support the assets they own or to support the ongoing marketing initiatives in which PPCS and those suppliers had previously invested."
The company would offer jobs at other facilities as opportunities arose to those affected by the proposed closures.
