NZ’s Silver Fern Farms eyes closures

Posted by Nicole Eckersley on 18th June 2010

New Zealand meat processor Silver Fern Farms has announced plans to close its Canterbury lamb-cutting plant and restructure operations at its Belfast facility.

The moves, which could affect up to 174 jobs, come as Silver Fern looks to streamline its operations and improve efficiency at its sites on New Zealand’s South Island.

As well as the Canterbury closure, the company is also looking to close the rendering and casings departments and restructure the coldstore department at its Belfast plant.

Silver Fern Farms’ chief executive Keith Cooper said the proposed closures were a result of the company’s focus on streamlining operations and optimising efficiencies across its various processing sites on New Zealand’s South Island.

The company began a consultation process with employees at the Canterbury and Belfast plants this week. A final decision will be made 25 June once that process has concluded, the company said.

The red meat industry is suffering from the threat of alternative land uses, processing overcapacity, weak processor profitability and low farmer returns, it added.

“Against this backdrop Silver Fern Farms must, and will, continue to make difficult decisions to maintain industry competitiveness and give security to the business and our farmer-shareholders going forward” said 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”.

Of the up to 174 employees affected by the proposals, some 135 will be at the Canterbury plant and 39 at the Belfast facility.

In 2008, Silver Fern closed the slaughter chains at Canterbury but retained the lamb cutting operation to cater for an imbalance between the forecast kill and Silver Fern Farms’ overall cutting capacity.

“Since that time sheep and lamb kill numbers in the South Island have dropped and with increased onsite cutting at slaughter plants, the imbalance is no longer an issue,” Cooper said.

Under the plans, Silver Fern Farms will also look to utilise the spare cold storage capacity that would become available at Canterbury to consolidate and export all Belfast, Fairton, Hokitika and Islington product at and from the one site.

A rendering facility at Washdyke run by Silver Fern’s Farmbrands venture gave the company an alternative to rendering at the Belfast site, which would have needed investment for upgrades, the company said.

However, Silver Fern is not planning to cease the beef slaughter operation at Belfast, its largest South island beef processing plant.

“Our Belfast beef plant slaughter and boning operations will carry on as normal playing an important role in supplying premium quality beef into the company’s integrated supply chain programmes, and will continue to be a key enabler of Silver Fern Farms’ plate-to-pasture strategy into the future,” Cooper said.

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