Silver Fern Farms has confirmed it will close its Fairton sheepmeat processing plant following a continued decline in regional sheep numbers.
Silver Fern Farms chief executive Dean Hamilton says support is being offered to the 370 people at Fairton affected by the closure.
“We understand this decision will have a significant impact on our people at Fairton. Today, has obviously been a difficult day. However, we cannot ignore the large decline which has happened to sheep numbers in this region as a result of progressive land use changes over the last 10 years.
“We will be paying redundancy to all affected staff. In addition, we have 230 roles available for them at our other sites, should they wish to take them up. The closure is not the fault of our staff at Fairton – we value their skills and would welcome the chance to retain them within Silver Fern Farms. We are opening a Resource Centre in Ashburton tomorrow to assist staff with the changes and to transition to new employment.”
Silver Fern Farms will continue to operate its pelt house operation from the site, which services its other three sheepmeat plants in the South Island.
“We have not made any decisions with respect to the future of the broader site. We have absolutely no intention of bottling water as has been speculated on without basis by some parties,” says Hamilton.
He explains the company needs to ensure it has the right plants at the right places – and then focus its investment at these long-term plants to enable them to be best in class.
“The closure of Fairton will allow us to consolidate our sheep processing for the region at our nearby Pareora plant which is approximately one hour away. We have spent $7 million at Pareora in the last 12 months to improve its cold-storage capability and add a state-of-the-art venison line there and will now invest a further $1 million to support the consolidation of Fairton’s sheep volume. We want to grow our sheep and venison volumes in the region and we believe having one large efficient plant will allow us to do that.
The investment of over $260m by Shanghai Maling in December last year to form a 50:50 partnership with Silver Fern Farms Co-operative, has given the company the capacity to invest $22m in capital expenditure this year – a near threefold increase on the $8m spent in the year before Shanghai Maling committed to invest, says Hamilton.
“This capital expenditure will include health and safety improvements, robotics, systems, processing room upgrades and more efficient cold chain infrastructure. We expect to continue to spend over $20m a year in the foreseeable future. “