Dunedin plant closure to cost 40 jobs

Milmeq in Dunedin is set to close. Photo: Gregor Richardson
Milmeq in Dunedin is set to close. Photo: Gregor Richardson
The award-winning Dunedin division of engineering specialist Milmeq is closing with the loss of 40 jobs.

The remainder of the private, family-owned company is being split up and sold to other New Zealand and Australian companies, which secures 25 Auckland jobs and eight in Brisbane.

Milmeq's Dunedin manufacturing plant has been for sale for about six months, and with no new orders, the decision had to be taken to close, board chairman Ralph Marshall said when contacted in Melbourne yesterday.

''It's far from an ideal time [for staff],'' Mr Marshall said of the impending Christmas break.

He was hopeful up to 30 of the 40 Dunedin staff could be offered work with the new buyers, but that depended on their willingness to relocate to Christchurch, Hastings, Auckland or Brisbane.

''It [Dunedin closure] is absolutely the low point of this transaction ... unavoidable but incredibly difficult,'' he said.

Milmeq custom-designs, engineers and manufactures systems for primary food processing, materials handling, chilling and freezing within the protein industry.

Mr Marshall said ''world markets have been challenging'' for the past 12 to 18 months with inter-company consolidations, Australia's drought and the uncertainty surrounding the US-China trade tariff war.

''Companies are just not making reinvestment decisions at the moment.''

While there had been no interest from local engineering companies to buy the division, Mr Marshall hoped they might be in a position to offer some jobs.

''[But] it seems everyone is at capacity,'' he said.

He reassured staff, material suppliers and clients that ''all obligations would be met'', including completion of projects already under way.

He said contracts could take between six months and two years to secure, and there were none at present.

Mr Marshall declined to disclose the sale price.

Last Friday, a sale agreement was signed for Milmeq's chilling and freezing capability to New Zealand-listed company Mercer Group, effective from March 1.

A separate conditional agreement, expected to be settled in January with Australian project delivery company Wiley & Co, has been made for the sale of Milmeq's meat processing system design and engineering capability.

Mr Marshall said the Dunedin site did not fit into the growth strategy for either Mercer or Wiley.

Staff would, as planned, take leave from December 21 for the Christmas break, then in a ''staggered'' closure they would complete existing contracts, before being laid off.

Given the time Milmeq had been operating, he believed there would be some ''significant redundancies'' payments, which the company would honour.

Mr Marshall said no decision had been made on the future of the premises, on the corner of Portsmouth Dr and Strathallan St.

In mid-2013, Milmeq in Dunedin had about 70 staff, including 40 in manufacturing.

At the time, it had just won an $A18million (then $NZ21.7million) contract to provide processing technology to a new beef plant in Australia's Northern Territory.

Mr Marshall said Milmeq had over several decades provided processing plants for 500 to 600 companies worldwide.

''People can be proud of what we have achieved,'' Mr Marshall said.

The company was established in Dunedin and it began operations in 1952 as Refrigeration Engineering.

By 2011, its four engineering contracting business units - Realcold Industrial, Realcold Mechanical, Millers Mechanical and Realcold Milmech - were merged and renamed Milmeq.

In 2011, Milmeq won the top award in the mechanical and manufacturing category of the New Zealand Engineering Excellence Awards.

Two years ago, Milmeq was a finalist in three categories in the Otago Chamber of Commerce business awards.


Very sad times for the Staff and Dunedin