Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Fairton plant to close as Silver Fern downsizes capacity

Fairton plant to close as Silver Fern downsizes capacity to keep pace with falling sheep numbers

By Jonathan Underhill

May 17 (BusinessDesk) - 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 1 million prior to 2010, it said.

Silver Fern Farms told some 370 workers affected by the closure today 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 today.

“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. It makes economic sense to consolidate this volume at our nearby Pareora site which has the capacity to process the combined numbers," said chief executive Dean Hamilton.

“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 $267 million 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 $30.6 million last year in what it called a "very challenging year across the industry".

The deal enabled Silver Fern to repay its debt, removing a threat from its banking syndicate to withdraw support. The company cut net debt to $107 million from $121 million a year earlier, and halved its finance costs to $14.8 million, it said in January.

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

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."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO:

No More Dog Docking: New Animal Welfare Regulations Progressed

“These 46 regulations include stock transport, farm husbandry, companion and working animals, pigs, layer hens and the way animals are accounted for in research, testing and teaching.” More>>

ALSO:

Employment: Most Kiwifruit Contractors Breaking Law

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors are breaching their obligations as employers. More>>

ALSO:

'Work Experience': Welfare Group Opposes The Warehouse Workfare

“This programme is about exploiting unemployed youth, not teaching them skills. The government are subsidising the Warehouse in the name of reducing benefit dependency,” says Vanessa Cole, spokesperson for Auckland Action Against Poverty. More>>

ALSO:

Internet Taxes: Labour To Target $600M In Unpaid Taxes From Multinationals

The Labour Party would target multinationals operating in New Zealand to ensure they don't avoid paying tax if it wins power and is targeting $600 million over three years through a "diverted profits tax," says leader Andrew Little. More>>

ALSO: