Silver Fern Farms is planning to close its Fairton sheepmeat processing plant following a continued decline in regional sheep numbers.
Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process.
Silver Fern Farms Chief Executive Dean Hamilton says the proposed closure is due to a significant decline in processing numbers over the last 10 years and the opportunity to now process the consolidated volume at its nearby Pareora site.
“There has been significant land-use change in Canterbury and Marlborough over the last decade and there are fewer sheep farms in these regions as they have made way for other uses such as dairy and wine. Higher returns from land-use conversion, and periods of drought in these regions have contributed to this decline in sheep numbers. While our beef processing volumes have risen significantly over this period, the lamb numbers available have steadily decreased.
“Fairton was consistently processing over 1 million lambs prior to 2010. Last season we processed under 500,000 lambs. This year that has continued to decline and we processed just over 325,000 in a six month seasonal operation.
“Whilst we believe the pace of land-use change has slowed considerably, we expect sheep numbers to consolidate around current levels rather than expand in the foreseeable future. It makes economic sense to consolidate this volume at our nearby Pareora site which has the capacity to process the combined numbers.
“Pareora is a large multi-species plant, an hour down the road in Timaru. Consolidating at one plant will provide a longer season with higher staff retention rates. We have recently invested $7m at Pareora to add to its capability.”
Support is being offered to the 370 people at Fairton affected by the proposed closure.
“We understand this will have a significant impact on our people at Fairton as they work through the consultation process and weigh their options. Whilst it is disappointing to propose closure, we cannot ignore the changes that have occurred.
“We have set up support for our people through this period, and if the decision is reached to close we will assist them with opportunities at our other sites across the business – we expect there will be 230 available roles at our plants in Belfast and Pareora, as well as at Hokitika, and further roles at our sites around the country as the new season commences.
“We will be working closely with our livestock suppliers through any transition – the majority of whom already supply both plants. We remain fully committed to providing a competitive service offering to our farmer partners in the region and the proposed changes would support us in doing that.”