Silver Fern Farms proposes plant closure, 370 jobs at stake

The mid-Canterbury town of Ashburton looks set to lose one of its biggest employers after Silver Fern Farms said it is planning to close its 125-year-old Fairton sheepmeat processing plant with the loss of 370 jobs following a continued decline in regional sheep numbers.

The Dunedin-based meat company said it had advised its staff of the proposal to permanently close the site, and had discussed potential transfer options to its other sites in the region as part of the consultation process.

Chief executive Dean Hamilton said the proposed closure was due to a significant decline in processing numbers over the last 10 years and the opportunity to now process the consolidated volume at its Pareora, Timaru, site.

"There has been significant land-use change in Canterbury and Marlborough over the last decade and there are fewer sheep farms in these regions as they have made way for other uses such as dairy and wine," he said.

Higher returns from land-use conversion, and periods of drought in these regions have contributed to the decline in sheep numbers, he said.

While beef processing volumes had risen significantly over this period, the lamb numbers available had steadily decreased.

Fairton was consistently processing more than 1 million lambs prior to 2010. Last season, the plant processed fewer than 500,000 lambs.

This year that had continued to decline and the company had processed just more than 325,000 in a six-month seasonal operation.

Hamilton said the company expected sheep numbers to consolidate at about current levels.

Support is being offered to the 370 people at Fairton affected by the proposed closure.

Hamilton said there would be 230 available roles at the company's plants in Belfast and Pareora, as well as at Hokitika, and further roles at sites around the country as the new season commenced.

The Meat Workers Union said that members working at Fairton were "devastated" by the announcement.

The company has announced a two-week consultation process and said a final decision would be made on May 31.

"Despite the workers fearing the worst for months, they always hope for the best," said Graham Cooke, National Secretary of the NZ Meat Workers Union.

"While the Meat Workers Union will engage with the consultation process, we don't have high hopes of a change in decision by the company," Cooke said.

"This is tragic for these meat workers and the Ashburton community, with the loss of another 300 good jobs in the meat industry," he said.

Bill Watt, Canterbury branch secretary for the NZ Meatworkers Union, said that there was a "range of emotions" shown by union members when management unveiled the proposal today.

However, he said most could see the writing on the wall, given the decline in sheep numbers over the last few years.

Watt said it was possible that many of the company's Ashburton workforce could take up opportunities in Timaru or Christchurch.

"For most it did not come as a big shock because of less stock has been coming through the works over the last three or four years.

"We were expecting this decision but it is a shock when it happens."

Watt said the facility was processing about 30 per cent of the amount it would have processed five years ago.

"It was once a good shed and now it's no more."

Talk that the works would be turned into a water-bottling plant was dismissed by Silver Fern Farms as being "totally baseless".

Last year China's Shanghai Maling bought a controlling stake in Silver Fern Farms, paying $267 million in cash for 50 per cent.

The sale, which was opposed by a group of dissident farmers and the New Zealand First Party, was approved by the government in September on the recommendation of the Overseas Investment Office.