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Silver Fern Farms' acquisition of the Frasertown sheep processing plant, near Wairoa in northern Hawkes Bay, shows the company's "absolute confidence" in the sheepmeat sector, chairman Eoin Garden says.
The company yesterday announced the purchase, for an undisclosed sum, saying it was effective immediately. The single chain plant processed about 3750 sheep a week.
It was intended to run Frasertown as a stand-alone operation with networks into various marketing and operations capability. The plant employed about 40 staff and it was intended all staff would remain.
In a statement, Mr Garden said the acquisition would reduce livestock transport distances and would give Wairoa and Gisborne farmers "a true local alternative".
"This shows we have absolute confidence in the sheepmeat sector. It allows us as a farmer-owned co-operative to show the initiative in the sector that sometimes appears to be operating within a leadership vacuum," he said.
Silver Fern Farms chief executive Keith Cooper said that while the recent red meat strategy document made many theoretical recommendations, creating a sustainable red meat sector would ultimately be driven by commercial decisions.
The strategy, which was initiated by the Meat Industry Association and Beef and Lamb NZ and released in May, aimed at improving the sector's viability and increasing its earnings from $8 billion to $14 billion by 2025.
In April, Silver Fern Farms increased its presence in the beef processing sector when it bought a plant at Waitoa in Waikato. It is also rebuilding a beef processing plant on its nearby Te Aroha site.