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A $10 million expansion at Cerebos Gregg's Dunedin plant will add 17 new jobs to the city.
The company yesterday confirmed the number of jobs, which would be advertised soon.
The good news comes in what has been a difficult year in the South, with a Southern Cross Forest Products restructure costing 79 jobs at Balclutha, Milton and Mosgiel, and about 70 job losses at Oceana Gold's Macraes mine near Palmerston.
Dunedin Mayor Dave Cull said the new jobs were ''a great outcome''.
The confirmation came as work continues to demolish a Forth St building that Cerebos Gregg's New Zealand country manager, Andre Gargiulo, said was once part of the original Gregg's factory. The building being demolished had been ''unused for many years now''.
''They have been empty for a while and in a state of disrepair and needed to be removed.''
The company announced in March it would pump $10 million into expanding its Dunedin-based coffee factory.
That was part of a plan to consolidate its coffee and food production to Dunedin and Sydney - a decision expected to result in the loss of up to 125 jobs from its Auckland plant when it shuts on December 19.
At present, the Dunedin facility produced only instant coffee, but by December it was expected roast and ground coffee would also be manufactured at the site.
That meant it would become the centre of the company's coffee production in New Zealand.
The Forth St building being demolished would be replaced by an extension of a warehouse, a new amenities block for staff, and some car parking spaces.
''Essentially, the new warehouse will be built over the old buildings, so it's really all about gaining extra storage capacity.''
The construction of the new warehouse was due to be completed by the end of the year. About 40 people worked at the plant, Mr Gargiulo said.