Meat plant fate causes staff jitters

The fate of more than 300 jobs at Silver Fern Farms’ Fairton plant in Ashburton may be decided next week after management notified workers of a meeting.

Speculation is swirling the sheepmeat processing plant might close, after a decision last year to shift bobby calf processing to Pareora, south of Timaru, and a fall-off in sheep supply.

‘‘It looks ominous but we don’t know anything. The philosophy will be to tell the people affected first,’’ Meatworkers Union Canterbury secretary Bill Watt said.

An SFF spokesman said: ‘‘It would be inappropriate and unfair on our people to comment any further. We’ll be happy to have a conversation with you [the media] after we’ve met with our people.’’

Federated Farmers South Canterbury meat and fibre spokesman Miles Anderson said he had not heard anything but would not be surprised if it closed.

‘‘The number of sheep in mid and north Canterbury has dropped dramatically and there have been questions over whether SFF has the correct number of plants for the stock they process,’’ he said.

‘‘They could either shut the plant completely, or convert it to process just beef and deer. For the poor people who work there, it will be a nervous time.’’

Last year there were two chains operating but this had been reduced to one.

Labour primary industries spokesman Damien O’Connor said a closure would not surprise him.

‘‘It seems inevitable that some processing will shift to China, and some farmers may be moving to Alliance Group because of their unease.’’

In December Chinese company Shanghai Maling invested $267 million in cash in return for a 50 per cent stake in SFF’s business.

O’Connor said SFF might have had a windfall gain in one market, but overcapacity could undermine its long-term viability.

NZ First leader Winston Peters said the plant ‘‘looked likely to be axed’’.

‘‘A staff meeting has been called at Fairton. Optimists might say this is about expansion but realists will see this for what it is: either major retrenchment or outright closure,’’ Peters said.

‘‘Last September … Silver Fern Farms had already earmarked Fairton to close. Less than a year ago the Chinese buyers of Silver Fern Farms were briefing their shareholders about Fairton and Waitane’s closure. Where did the Chinese buyers of Silver Fern Farms get that information? No less than Silver Fern Farms itself.’’

The Deloitte South Island index report for the quarter ended March 31 shows SFF had the biggest fall in market capitalisation, declining 41.5 per cent to $37.1m.

The company’s share price fell by a third in early March, from 89 cents to 52c.

During the quarter, SFF released its annual results to September 30, 2016, announcing total income of $2.2 billion, down 11.2 per cent on the previous year, and a net loss after tax of $30.6m (compared with a $24.9m profit the previous year).

SFF chairman Rob Hewett said the result was ‘‘particularly disappointing’’. Fresh Water 2017,