Silver Fern Farms is to sell its Silverstream sheep boning plant near Mosgiel, with the loss of permanent jobs.
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The sale, which will involve the leasing back of its lamb cutting rooms, is to Christchurch-based Scales Group for an undisclosed price.
Polarcold Stores, which is part of the Scales Group, will operate the cold stores on the site.
The company will lease the office block, two processing rooms, rendering and other workshops and some amenities blocks.
“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,” said Silver Fern Farms chief executive Keith Cooper.
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By GlobalDataThe company did not say how many jobs would be lost.
Silver Fern Farms executives have told staff 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,” Cooper added.
Operations are being geared up at other South Island plants to increase efficiency in the long term and save costs incurred from the transport of carcasses off site to Silverstream.
Earlier this month, Silver Fern Farms, New Zealand’s largest meat processor, announced plans for agricultural group PGG Wrightson to buy a 50% stake in the business.
The deal requires the approval of 75% of the farmers who supply Silver Fern, which plans to retain a co-operative structure.
The vote is planned for September.
