Whanganui business Tasman Tanning has purchased New Zealand Light Leathers' Washdyke Tannery in Timaru.
Tasman Tanning is New Zealand's largest producer of finished leather, and the purchase was made in December.
It is strategic because it secures the future of the Washdyke site, which will trade as Tasman Tanning South Island Limited.
The employees of New Zealand Light Leathers Limited have transferred to the new company.
"The acquisition will also give Tasman Tanning access to South Island wet blue hides to support growth in finished leather production at its Whanganui site", Tasman Tanning chairman Hunter Tait said.