Silver Fern Farms chief executive Dean Hamilton said the proposed closure is due to a “significant decline in processing numbers over the last 10 years”.
“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,” he explained. “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.”
According to Hamilton, Fairton was consistently processing over one million lambs prior to 2010 but this has dropped in recent years. “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.”
‘Significant impact’ on jobs
The business plans to shift work to its Pareora site which has seen significant investment. “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.”
Hamilton added that support will be 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,” he said. “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.”
There will be a two-week consultation on the proposal with a final decision due on 31 May however New Zealand Meat Workers Union national secretary Graham Cooke was not hopeful of the plant being saved.
“While the Meat Workers Union will engage with the consultation process, we don’t have high hopes of a change in decision by the company,” said Cooke. “This plant has been progressively run down despite Silver Ferns Farm CEO Dean Hamilton stating last June that ‘... there has been no decision by the company to do anything differently next year at any plant’.”
The union said members at the Fairton plant are “devastated” at the proposal.
New Zealand First Leader and Member of Parliament for Northland Winston Peters labelled the move a “damn disgraceful way to treat loyal staff”.
“These workers and their families have lived on tenterhooks ever since the effective Chinese owner [Shanghai Maling] of Silver Fern Farms said Fairton would close in a briefing it gave last year to its shareholders. The quislings denied it and some in the local media went along with it.
Peters criticised the government for not intervening in the Shanghai Maling investment of Silver Fern Farms.
“Today’s news rams home not only the price of unfettered foreign ownership but this government’s unwillingness to stop meat processing slipping into foreign control. Half the industry is either foreign-owned or heading that way, so we are at the tipping point. In a world crying out for high quality protein we should be opening plants not closing them, but this government is too dense to figure that out.”