Alliance Group returns to profit after two years with $93m turnaround
After two years, Alliance Group has returned to profit.
Sheepmeat, calves and night shift venison seasonal processing ceased at the plant at the end of September. Venison day shift processing at Smithfield will continue until no later than the end of December and the plant will then close.
Approximately 600 staff are employed during peak season at the 139-year-old Smithfield plant, which has been owned by Alliance since 1989.
Alliance says wherever possible, impacted staff will be offered the opportunity to apply for re-deployment at its other processing plants, however the decision means many Smithfield employees will be made redundant. Redundant staff will receive payments according to their employment agreements. The decision follows a two-week consultation period with Smithfield staff and unions.
Willie Wiese, chief executive of Alliance, says closing the plant was an extremely difficult decision for the company.
“Our thoughts are with our people and their families affected by the closure of this plant. Smithfield has been a familiar presence in the region for almost 140 years and we know this decision will impact the Timaru community and South Canterbury.
“Unfortunately, we must face the reality of declining sheep processing numbers because of land-use change. This has resulted in surplus capacity in our plant network. We cannot maintain excess processing capacity when livestock numbers don't support it.
Read More
- Editorial: Smithfield closure just the start?
- Declining sheep numbers the last straw for plant closure
- 'Skewed' Govt policy blamed for meat plant closure
“According to our forecasts, we can process our farmers’ sheep, deer, and cattle at our four other South Island plants during peak season, without the need for a fifth plant.
"This closure will also mean we will have the right scale and a lower cost structure to meet the needs of our farmers and customers.
“I want to acknowledge the feedback from our people over the consultation period. We have made the decision to close the plant with a heavy heart, knowing the significant effect this will have on our people and the community.
“Despite exploring all possible alternatives, we were left with no viable option. While we know the outcome is not what anyone wanted, we are committed to working through the closure process as respectfully as possible.
“Alliance is grateful for the efforts of local authorities, Venture Timaru, local MPs and support agencies who have rallied around our people over the past few weeks.”
In total, Alliance operates six other plants at:
- Lorneville, near Invercargill (sheepmeat, venison and beef)
- Mataura, Southland (beef)
- Pukeuri, near Oamaru (sheepmeat and beef)
- Nelson, (sheepmeat)
- Levin, Horowhenua (sheepmeat and beef)
- Dannevirke, Hawke’s Bay (sheepmeat)
