Job cuts as closure planned

06:17, Jun 14 2010

The nation's biggest meat processor, Silver Fern Farms, is set to axe another 174 jobs at two of its Christchurch meatworks.

The cooperative, formerly known as PPCS, axed about 1000 jobs in 2008 when it closed or cut back at six plants around the country in a rationalisation programme.

Those cutbacks included closing the slaughter chains at its Christchurch lamb cutting plant but it retained the lamb cutting operation to cater for an imbalance between the forecast kill and the company's overall cutting capacity, but today it said the cutting plant would close as well with the loss of 135 jobs.

Silver Fern will also close the rendering and casings departments and restructure the coldstore department at its beef plant in the suburb of Belfast, at a cost of 39 jobs.

Chief executive Keith Cooper said that in 2009 the company formed a joint venture company, Farmbrands, to provide capital for new specialist rendering facilities with improved processing and greater expertise in technology and marketing.

Farmbrands used that capital to buy a new state-of-the-art rendering plant at Washdyke for rendering animal fats from the Belfast plant into tallow and grease and other wastes into meal. Retaining rendering at the old Belfast plant would require significant new capital spending on buildings, hygiene and environmental standards.

Mr Cooper said the proposed closures were a result of the company's continued focus on streamlining business operations and optimising efficiencies across its South Island meatworks.

It has four slaughter plants in the South Island: Fairton at Ashburton (capacity 8000 head per day), Pareora at Timaru (12000/day), Finegand at Balclutha (12,000/day) and Waitane at Gore (3500/day).

The company has begun consultation with workers and their representatives at the two Christchurch plants and said a final decision would be made on June 25.

He said the red meat industry was suffering from the threat of alternative land uses, processing overcapacity, weak processor profitability and low farmer returns.

The company must and would continue to make difficult decisions to maintain industry competitiveness and give security to the business and its farmer-shareholders, said Mr Cooper.

"This means integrating our operations where possible so that the majority of our product is slaughtered, cut and packed at the same plant to attain the highest standards of food hygiene and safety and minimise our environmental impact."

Acknowledging the redundancies were "unwelcome news" for workers, their families and the wider community, Mr Cooper said the company would offer alternative work at other plants, where there were vacancies.

Mr Cooper said that since the 2008 rationalisation, the sheep and lamb kill numbers in the South Island had dropped and with increased onsite cutting at slaughter plants, there was no longer a need for the Canterbury cutting plant, which broke down sheepmeat joints to cuts for sale.

Silver Fern also planned to use the spare cold storage capacity that axing the cutting plant would free-up at Christchurch to consolidate and export all Belfast, Fairton, Hokitika and Islington product from the one site.

The cooperative does not plan to stop its beef slaughter and boning at Belfast.

The company is controlled by more than 20,000 farmer shareholders and operates 22 processing facilities with more than 7000 workers at the peak of the season.