In 2012, the company moved its sheep-processing facility from Mataura to its sister plant at Lorneville, near Invercargill.
It spent $15 million upgrading beef-processing facilities and increasing capacity at Mataura.
The site is now being reconfigured around the beef operations, which employ about 450 people at peak production.
Demolition of the sheep section of the 121-year-old plant began in February and work was ''progressing well''. Contractors were working on the removal of the old freezers, plant manager Tony Gilder said.
About three-quarters of the project had been completed and work was scheduled to be finished by the end of the year.
Specialist Wanganui-based demolition company Jurgens has the contract for the work.
Much of the equipment that was no longer needed had been either transferred to other Alliance Group plants or sold.
