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Silver Fern Farms to close Fairton plant

NZN 17/05/2017 Jonathan Underhill

Silver Fern Farms, New Zealand's biggest meat company, plans to close its plant at Fairton in what is the first move to address its processing over-capacity since China's Shanghai Maling took control at the end of last year.

Sheepmeat processing at the plant has slumped in the past decade, reflecting a regional decline in sheep numbers, as land was converted to dairying and grape growing, the company said in a statement.

About 500,000 lambs were slaughtered at the facility north of the Canterbury town of Ashburton last season from "consistently" more than one million prior to 2010, it said.

Silver Fern Farms told some 370 workers affected by the closure on Wednesday but rumours had already been swirling and the New Zealand First Party issued a statement last week asking if closure was imminent.

There would be potential transfer options to other plants in the region, the company said.

"Whilst we believe the pace of land-use change has slowed considerably, we expect sheep numbers to consolidate around current levels rather than expand in the foreseeable future,'' said chief executive Dean Hamilton.

''It makes economic sense to consolidate this volume at our nearby Pareora site which has the capacity to process the combined numbers.

"Pareora is a large multi-species plant, an hour down the road in Timaru," he said.

"Consolidating at one plant will provide a longer season with higher staff retention rates. We have recently invested $7 million at Pareora to add to its capability."

Silver Fern voted last year to sell a half stake in the business to Shanghai Maling for $267m and the original cooperative of farmers now owns the remaining half stake, although Shanghai Maling has the casting vote on key strategic issues.

The meat processor posted a loss of $30.6m last year in what it called a "very challenging year across the industry".

The tie-up enables Silver Fern to tap Shanghai Maling's supply chain and parent Bright Food's wholesale and retail networks to distribute into China.

Mr Hamilton said Silver Fern expects to have "230 available roles at our plants in Belfast and Pareora, as well as at Hokitika, and further roles at our sites around the country as the new season commences".

New Zealand First leader Winston Peters said "it's a damn disgraceful way to treat loyal staff".

"When NZ First challenged Silver Fern Farms' cowardly managers last year about closures like this, they responded with one hollow denial after another. Now what do we have today, 277 people getting the boot that will likely affect some 1000 family members.''

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