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About 120 Alliance Group employees, mostly at Lorneville and Pukeuri, are affected by a temporary reconfiguration of ovine skins and pelt processing operations across six plants.
In a statement, general manager manufacturing Willie Wiese said there would be no job losses and affected staff would be redeployed to other processing operations in the company’s plant network. The level of skins and pelts processing would change at Smithfield (Timaru), Nelson, Levin and Dannevirke plants.
Global price conditions for skins and pelts meant processing of those co-products in its current configuration was not viable. In a note to staff, Mr Wiese said China was the major global buyer of those co-products and a combination of the United States-China trade dispute and stronger environmental regulations impacting small tanneries had resulted in weaker demand.
Alliance Group was working through various options and alternatives with employees and the New Zealand Meat Workers and Related Trades Union. The company would continue to monitor its global markets to determine when normal skin and pelt processing could resume.
In August, Silver Fern Farms confirmed it would close the Fairton pelt house near Ashburton and consolidate pelt volumes at its Finegand site near Balclutha.
The company cited continued low sheepmeat numbers in the South Island leading to excess pelt processing capacity, while pelt processors were also seeing low returns from the global market. Those factors, coupled with the high overhead costs due to the large site, made pelt processing unsustainable at Fairton.