Silver Fern confirms lamb plant restructuring

Keith Cooper
Keith Cooper
Silver Fern Farms' restructuring plan to sell its Silverstream lamb cut plant at Mosgiel to Scales Corp, of Christchurch, and lease it back is going ahead.

A Silver Fern Farms spokesman contacted yesterday confirmed the proposal, announced on July 17, was going ahead.

Restructuring at the Silverstream plant, purchased by Silver Fern following the collapse of Fortex in March 1994, will see the loss of about 50 seasonal jobs next year, while the wider Silver Fern "rightsize" restructuring plans have cost almost 1000 jobs across the sector nationally.

Country-wide depressed lamb prices saw Silver Fern post a loss before tax for the year to August of $40.3 million, but it turned a profit for the first half of the current financial year and cut its debt by $63 million.

Silver Fern chief executive Keith Cooper has in the past cited the expectation of there being up to three million fewer lambs in the South Island available for slaughter next year - a sector-wide issue pressuring all meat companies to rationalise their killing capacity in the face of rising costs and reduced returns.

Since mid-April almost 700 jobs have been lost in Dunedin and Mosgiel, with the closure of Silverstream's neighbour Fisher and Paykel Appliances and other, smaller businesses.

A $220 million merger proposal from listed PGG Wrightson to take a 50% stake in Silver Fern will go to a farmers' vote in September and requires 75% approval.

 

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