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Meat workers are nervous that plants could close if PPCS and Alliance were to merge, but a shortage of staff in the meat industry may temper any redundancies.
Otago Southland Meat Workers Union secretary Gary Davis said workers feared that the joint study announced last week by the companies could lead to plant closures.
But the equation was more complex than just closing a plant, he said. South Island killing and processing capacity was needed during the peak of the season from December to March.
Restrictions on effluent discharge at some plants, and a shortage of workers, meant it was not a case of closing one and consolidating at another. PPCS Finegand near Balclutha and the Alliance plant at Mataura in Southland both had discharge conditions and a shortage of workers, which would prevent them from increasing production should another plant in those areas close.
He said Finegand could work two shifts a day but there were not enough people to staff the second shift. The two companies employ 14,000 workers in the peak of the season.
PPCS and Alliance said on Thursday that they had commissioned PricewaterhouseCoopers to do a future-options study on how to improve shareholder returns. The study will look at all aspects of the businesses, including the possibility and viability of a merger.
Davis said a merger would be difficult, given the two co-operatives were different entities in terms of their financial strength and geographic spread. A merger would also not necessarily reduce killing and processing capacity.
"Anything is possible ... They can share facilities, and then someone else comes along and builds a new plant."
Agriculture Minister Jim Anderton said the Government would be watching the outcome of the study, given its importance not just for the two co-operatives, but also the economy, because the two companies earned combined revenue of $3.1 billion.
- OTAGO DAILY TIMES
