Silver Fern Farms to close Canterbury departments

Silver Fern Farms to close Canterbury lamb cutting and Belfast rendering and casings departments

Silver Fern Farms today confirmed that its lamb cutting, rendering and casings departments at its Christchurch site are to close.

Silver Fern Farms’ Chief Executive Keith Cooper said that the decision was finalised following the conclusion of consultation processes with employees and their representatives. The closures are a result of Silver Fern Farms’ continued focus on streamlining business operations and optimising efficiencies across the company’s various processing sites in the South Island.

“As our customers here and overseas continue to demand product that meets their changing quality expectations we have to be able to integrate our operations where it makes sense to respond quickly to our markets’ needs. Ensuring that the majority of our product is slaughtered, cut and packed at the same plant to attain the highest standards of food hygiene and safety is part of achieving the best practice supply chain models we require to do this.”

“We understand the decision will have a direct impact on people’s livelihoods and the local community” said Mr Cooper. He explained that against the backdrop of an industry facing complex challenges, Silver Fern Farms would continue to make the difficult decisions.

“Our actions, whilst tough, are testimony to our commitment to do what we can to improve profitability for our supplier shareholders - actions speak louder than words.”

Mr Cooper spoke on Wednesday at the Federated Farmers Meat & Fibre AGM in Invercargill of the need for the industry to move on from debating industry challenges to solving them.

“It is relatively simple to point out what is wrong with the red meat sector but much harder to stand up and do something about it,” he said.

“Silver Fern Farms has made an application to the government’s Primary Growth Partnership to invest in sector transformation initiatives to adopt science, technology and optimisation models that will make sheep and beef farming more competitive and grow the industry”. Mr Cooper said that achieving the T150 target per head of lamb set by Federated Farmers by 2013 was achievable provided that farmers embraced change, accepted seasonal supply commitments as other primary production industries have done, and were prepared to invest and adopt new science and research.

The company began the consultation process with employees from the affected departments and their representatives on the 14 June 2010. 174 employees are impacted by the changes: 135 in the lamb cutting area and 39 in the casings and rendering departments. “We will be making every practical effort to assist our employees through this change and where possible offer alternative employment at our other plants where vacancies exist”. A resource centre will be established at the site where employees can access assistance in employment search and a range of support services including CV development, budget advice and counselling.

In 2008 Silver Fern Farms closed the slaughter chains at its Canterbury plant but retained the lamb cutting operation to cater for an imbalance between the forecast kill and overall cutting capacity. “Since that time sheep and lamb kill numbers in the South Island have dropped and, with increased onsite cutting at slaughter plants, the imbalance is no longer an issue.” said Mr Cooper. Silver Fern Farms plans to utilise the cold storage capacity at the Canterbury site to consolidate and export all Belfast, Fairton, Hokitika and Islington product from the one location.

With regard to the closure of the rendering and casings departments and restructuring of the coldstore operations, Mr Cooper explained that in 2009 the company formed a joint venture company, Farmbrands, to establish new specialist rendering facilities, improve processing efficiencies and product quality, and leverage expertise in technology, processing and marketing. The Farmbrands’ purchase of a new state of the art rendering facility at Washdyke (Timaru) had provided the company with an alternative for rendering Belfast material.

“Our Belfast beef plant slaughter, boning and packing operations will carry on as normal playing an important role in supplying premium quality beef into the company’s integrated supply chain programmes, and will continue to be a key enabler of Silver Fern Farms’ plate-to-pasture strategy into the future”, said Mr Cooper.

ENDS

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