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.
If the closure went ahead, Alliance said wherever possible it would offer workers the opportunity to apply for re-deployment at the company’s other plants.
However it anticipated there would be a significant number of redundancies.
The lamb processing season finished at the Smithfield plant on Wednesday. Venison processing was still running, but workers were told there were no shifts on Friday and to attend the meeting instead.
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.”
‘It’s gonna hit real hard’
One of the Alliance workers, Clint Agnew, started work at the plant 20 years ago and said staff were not given the chance to ask questions at Friday morning’s meeting. Agnew was annoyed and upset about the proposal to close the meatworks.
“I’m feeling a bit torn up really, a bit emotional and yeah, a bit sad. Luckily I’m venison so I don’t finish until December, but by then a lot of jobs will be taken because all the other fellas will go out and have found it.”
Agnew said it was hard to find work in Timaru, but he would stay in the town.
One woman, PJ, who works at Smithfield said after the meeting that everyone had been told they were losing their jobs, and Alliance was shutting the plant.
“It’s a proposal but I can see it happening.”
She said the news had come as a big blow and it was yet to fully sink in.
“This is a whole community, this is most of Timaru standing here so it’s gonna hit real hard.”
Another Alliance employee said he was sad at the thought of losing his job at the Smithfield meatworks.
Samiuela Kolovatu, who is originally from Tonga, said the team at the meatworks were like family and the job had given him good skills and experience.
“It’s a bit hard job, it’s a good money job and now there are lots of families and friends who don’t know what is going to happen in the long run.”
He said the company had not given reasons for the closure but staff had been given a document and told to send the company any questions and feedback.
“For now it is not yet confirmed… but they said the proposal is to close the plant permanently and they told us they are going to look for opportunities for some of the workers at other plants but it is not guaranteed for everyone.
“It’s going to impact our family and the people around us, there are so many people around here that are going to be looking for a job, it’s hard… I don’t know what is going to happen going forward.”
He said if the plant did close he would stay in Timaru and try to find another job.
“It’s really good money when we make it here, supports each other and family but for now, we just hold on.”
South Canterbury Chamber of Commerce chief executive Wendy Smith said it was a black Friday for Timaru.
“The immediate impact on those approximately 600 staff is absolutely terrible and our hearts go out to them.
“We will obviously ensure wherever we can that there are wraparound services for them, but this has a wider impact on all the service industries that support such a large business.”
She said the meatworks was part of the region’s agricultural, manufacturing and processing history and part of South Cantabrians DNA.
“It’s been well publicised that the red meat industry has been through challenging times and that is a concern, we are hoping that there are some small green shoots starting to show … but obviously there are some other issues we need to grapple with.”
Smith said the chamber would be looking to see how it could support those affected and help to build up business again.
“The company themselves will obviously have a level of support and then it will be the Ministry of Social Development and the rest of our community to support them wherever we can.”
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.
Wiese said a decline in sheep processing numbers was behind the new proposal.
“This proposal aims to align our operations with current livestock availability, ensuring we have the right scale and cost structure to meet future demands as a leading red meat processor.
“We simply cannot maintain excess processing capacity when livestock numbers don’t support it. This proposal aims to align our operations with current livestock availability, ensuring we have the right scale and cost structure to meet future demands as a leading red meat processor.
“By optimising our capacity to match livestock flows, we can position ourselves for long-term success and reduce our cost base. We simply cannot maintain excess processing capacity when livestock numbers don’t support it.”
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.
– additional reporting RNZ
