Dairy company Fonterra today (Monday) announced its final plans for re-establishing milk-processing operations at its Takaka site, damaged by fire last month. Changes to the site mean that one-third fewer staff will be needed.

Fonterra general manager New Zealand manufacturing Brent Taylor told staff at a briefing this morning that the company would be spending close to NZ$30m (US$20.5m) to refurbish the site's milk powder plant so it had sufficient capacity to process milk from the Golden Bay catchment, the company said in a statement.

The company would not be rebuilding the butter hall or the casein plant, Taylor said.

The planned changes to the site's configuration as part of the refurbishment meant approximately one-third fewer staff would be required at the Takaka site. Fonterra's human resources team and other support staff were already talking to employees and union representatives and working through a range of options focusing on redeployment opportunities, Mr Taylor said.

Mr Taylor said a number of factors had been taken into account in deciding the site's final configuration.

"We appreciate what this decision means to the community, and we have taken various environmental, social and economic considerations into account" he said. "We were quick to commit to maintaining a presence in Takaka. Partly that reflected this region's unique geography and the difficulties in transporting milk from Golden Bay to be processed elsewhere, but we were also very aware of the need to take a broad view of our place in the community in deciding the site's future."

"We are very conscious of the long-standing presence the dairy industry has had in Golden Bay, and of Fonterra's position as a major employer in the region. Board and management received a number of letters from shareholders and others outlining the economic and social impacts a complete withdrawal by Fonterra would have had on Takaka and the surrounding area, and these considerations were an important part of our decision," he said. "But, given the low volume of butter and casein we previously manufactured here, the cost of replicating the old manufacturing set-up simply could not be justified, and moving to milk powder production was the best option overall."

Taylor said every assistance would be given to all staff affected by the changes.

"Opportunities exist for redeployment within the company, and we are also working closely with local employers and government agencies to identify other employment options in the region. We will continue to make available all the support we can to help our people find suitable alternatives," he said.