Deep South Ice Cream to close old factory
The Invercargill Deep South Ice Cream plant will close next month, affecting 11 jobs.
Deep South Ice Cream co-owner and director Mike Killick said the Invercargill plant would stop manufacturing at the end of next month before consolidating with the company's Christchurch operation.
The Invercargill plant employs 11 staff who were notified of the closure last week. All staff members were offered employment at the company's Christchurch plant, of which three had shown interest, he said.
The Invercargill manufacturing plant was an old facility which struggled to meet "the modern day requirements" for dairy manufacturing without significant financial improvements, he said.
The company also had a very strained relationship with the building owners - the founders of the Deep South brand.
"The company has a very strained relationship with the Invercargill building owners (landlords) who have put very little investment into maintaining the facility to what would be considered a fit-for-purpose state by the directors.
"To compound this, at the start of the year, Deep South Ice Cream was given notice of a 63 per cent rent increase with no indication of any future capital investment in the leased facilities," Mr Killick said.
There was also an increase in cream prices and freight costs from Invercargill, as well as a disputed insurance claim after the closure of the Christchurch plant earlier this year for earthquake repairs, he said.
Deep South Ice Cream had been reviewing the options for the Invercargill plant for the past six months, he said.
"The leased property really isn't fit for purpose.
"We're at loggerheads with them [the landlords] on the value and investment into the facility."
Although Mr Killick would not put a figure on how much it would cost to save the Invercargill plant, he said it would cost "quite a significant chunk".
It was unfortunate the plant had to close because the intention had been to keep it running and supply the Australian market, he said.
Former Deep South Ice Cream owners and current landlords Brian and Jeanette Simon said they were "shellshocked" to hear the plant was closing but would not provide further comment yesterday.
- The Southland Times