KEY POINTS:
The country's biggest meat processing company is now looking to restructure plants in the South Island following yesterday's announcement of the planned closure of the Oringi, near Dannevirke, works, with the loss of 446 jobs.
PPCS chief executive Keith Cooper said sheep numbers were down while processing capacity had increased and the "right-sizing programme" sought to restore the balance.
Mr Cooper refused to disclose details, but said restructuring of plants in the South Island would begin "in the near future".
He said the biggest challenge to meat companies was the recent drop in New Zealand's lamb numbers due to many sheep farmers switching to dairying, which offered better returns, and two drought-ridden years which had hurt stock numbers.
Mr Cooper said two competing meat works had opened South Island plants recently, further diluting the stock supply.
He also took a pot shot at farmers for playing meat companies against each other to push up the price of their stock.
"It is probably half the problem we have in the industry today," he told The Dominion Post.
"We are changing our business model to encourage suppliers to commit to PPCS."
The Oringi plant had been open for 27 years, with a number of staff spending much of their working lives there.
The closure will cost the company at least $14 million in redundancy payments.
Mr Cooper said a consultation process would begin today with Oringi employees and their representatives and a final decision was expected within the next fortnight.
Yesterday's announcement was met with anger and disbelief.
Tararua District Mayor Maureen Reynolds said the decision was "devastating" and had come "out of the blue".
The plant had not been open since the season ended in March and some workers had taken on other jobs in the district while they waited for it to reopen in October.
Mike Lilo, who had worked at the plant for 27 years and delivered bread in the off-season, said a lot of Dannevirke businesses would feel the effect the job losses would have on the local economy.
He said there were not a lot of options for the majority of workers who woke this morning facing the prospect of unemployment.
"There's a lot of them out there now that are really worried that they might lose their homes because the employment here is not really good."
Work and Income New Zealand said 130 workers had already contacted the local branch.
- NZPA
