PRESS RELEASE 17 July 2008
Silverstream To Restructure Its Operations Following Sale And Lease Back
Silver Fern Farms has reached agreement for the sale and partial lease back of its Silverstream processing facility
near Mosgiel, outside Dunedin. The plant, which processes and packages lamb products from other Silver Fern Farm plants,
is being acquired by Christchurch based Scales Group for an undisclosed price. Polarcold Stores Limited, which is part
of the Scales Group, will operate the cold stores on the site.
In tandem with the sale and partial lease back, Silver Fern Farms will scale back certain operations, with various
functions consolidated within the site. This will result in a reduction in permanent staff required on the site and will
also mean the company will be looking for a lower number of replacement process workers in the coming season.
Silver Fern Farms Chief Executive Keith Cooper says the company will lease the office block, PR1, PR2, rendering and
other workshops and amenities in order to continue processing at the site. “The transaction is part of the company’s
ongoing ‘Rightsizing’ project, aimed at aligning processing capacity to supply and providing long term sustainability to
the business and improving returns to farmer shareholders.”
Mr Cooper says employees at Silverstream have been advised of the plant sale and the proposal to reconfigure the
operation. “The decision to sell the site and close part of its operations follows exhaustive review of our operations
and capabilities in light of the overall decline in sheep and lamb numbers. We haven’t taken the decision lightly, and
we recognise that our actions will have an impact on certain employees.”
He says while it’s ‘business as usual’ for the remainder of the plant, as with other plant rationalisations, every
practical effort would be made to assist those affected employees through change and offer alternative employment at
other processing facilities where vacancies exist.
“From an operational perspective the transaction is a normal business decision. We are involved in the business of meat
marketing and processing, and not in land ownership. Where we can realise value in operations that are not positioned
for long term returns, we will do so to the benefit of our supplier shareholders.”
Mr Cooper says operations are being geared up at other South Island plants to ensure self sufficiency, which will result
in increased efficiencies long term and cost savings that are currently being incurred from the transport of carcasses
off site to Silverstream.
“We are also acutely aware of the fact that forecasts for sheep and lamb supply are showing that there will be as many
as three million less sheep and lambs in the South Island next year alone,” he adds.
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