New Zealand-Another meat plant to lay off staff.

NEW ZEALAND-ANOTHER MEAT PLANT TO CLOSE.

Christchurch meat works is to shut with the loss of hundreds of jobs.

Dunedin-based Silver Fern Farms has proposed to close the sheep and lamb slaughter processing portion of its operation at the Canterbury processing plant near Christchurch.

The proposal to shut down the two slaughter chains was communicated to staff at the plant this morning, and would impact on a total of 225 processing and 24 administration and maintenance positions, SFF, previously known as PPCS, said.

SFF said there were approximately 70 redeployment opportunities at the Canterbury lamb cutting operation and the nearby Islington and Belfast plants.

The plant was also proposing to keep operating its boning room facilities.

Canterbury employs as many as 450 staff at peak of season.

SFF chief executive Keith Cooper said the closure of the slaughter operations was the final instalment of its Project Rightsize for 2008, a programme which was designed to align processing capacity with supply, enhance financial performance, and re-position the business as a true marketing organisation under the Silver Fern brand.

It reflects the overall decline in South Island sheep and lamb numbers, which are expected to drop by an estimated 2.2 million units next year, as conversions in traditional sheep and lamb farming areas to dairy and alternate land uses translate into lower stock units.

Cooper said SFF projections were broadly aligned with Meat and Wool Economic Service forecasts that signal an overall reduction in livestock over at least the next three years.

There were also specific issues that make the slaughter processing operation at Canterbury less tenable. These include the requirement for capital investment in effluent management systems, environmental upgrading, and limited development options compared to other key sites.

"The proximity to residential zoning also contributed to the decision,’’ he said.

The processors boning room facilities would continue to operate as usual, as the company needed to retain its processing capability to meet increased demand for chilled product across the business, Cooper said.

Cooper said while no further closures are planned, all operations are subject to ongoing review based on site economics.

With this proposal, Silver Farm Farms would have reduced the number of full operating sites by six, with lamb capacity reduced by five chains.

Since February 2007 the company has reduced debt by $150 million.