Alliance Group this morning told staff at a surprise meeting it is proposing to close its Smithfield meat processing plant.
CEO Willie Wiese said in a statement the closure was due to a decline in sheep processing numbers.
The 139-year-old Smithfield plant was the company’s oldest site and needed significant investment in repairs and maintenance to keep it operational.
“We know our people at Smithfield, their colleagues and the local community will be devastated by this proposal.
“Smithfield has a long and proud history, having been part of Alliance’s network for more than 30 years,” he said.
Consultation will run until October 11 and a final decision is expected to be made by October 18.
Timaru Mayor Nigel Bowen told RNZ the plant employed more than 600 people at peak season.
A closure would be significant for the region, given the large number of staff and supporting trades it would affect.
“We’ve been talking, certainly, with agencies, Chamber of Commerce, economic development, and certainly there’ll be as much support as possible wrapped around anyone if there is any closure of sorts,” he said.
“The community’s already starting to work together on what support could be offered if necessary, and what other work opportunities there are for people to go to, We’ll try our best to look out for everyone involved.”
Alliance was the country’s only entirely farmer-owned red meat co-operative. It was owned by about 4500 farmer shareholders and exported to more than 65 countries.
The announcement followed a tough year for Alliance – it reported a $70 million loss after tax in the year to September 2023.
This April, in a bid to remain farmer-owned, it turned to its farmer-shareholders to up their cash contributions, increased their shares and trimmed $3 a head off payments for livestock processed.
Alliance chairperson Mark Wynne told RNZ at the time the co-op needed up to $150m over the next two to three years to restore its balance sheet.
There had been a lot of talk about meat companies consolidating or trimming numbers in recent months, driven by a drop in the number of animals coming through the chain.
Land use change, drought forcing farmers to offload stock earlier and people exiting sheep farming due to low returns, meant there was not as much stock to be processed.
BX Foods, also known as Ōamaru Meats, cut 70 jobs just last month.
