Ag 19 march, 2015

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Thursday, March 19, 2015

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Fairton closure mooted BY MICHELLE NELSON MICHELLE.N@THEGUARDIAN.CO.NZ

A proposal to rationalise the country’s flagging red meat industry by consolidating the major players along the lines of the Fonterra model – including the closure of the Silver Fern Farms Fairton plant – has been met with caution. Lobby group Meat Industry Excellence (MIE) released the report earlier this week detailing a proposed road to reforming the industry.

It recommends closing 10 holding company dubbed Big meatworks, including the Fair- Red, to quarantine the assets ton plant, to cut costs generated marked for closure. by over-capacity, stating this to Big Red could also be accombe around the 51 per cent mark panied by a system of governcountrywide. ment-regulated chain licensing, In addition to the 10 Alliance to limit new investment in meat and Silver Fern Farms owned processing plants. plants tagged for closure, the The restructuring is pitched report recommends ANZCO to take place over five years, at and AFFCO, the two next larg- an estimated cost of $200 milest industry participants, also lion in asset write-downs and close three plants T Hand E five U LT I Mre-ATredundancies. EIf just the two main players spectively. MIE proposes FA LCO N Hcreating AS A aR Rconsolidated, I V E D the report found

in excess of $400 million could be saved over five years. If the smaller companies pitched in the reform could deliver savings of more than $1 billion in the same period. Silver Fern Farms chairman Rob Hewett said the co-operative was still working through details of the report. “Silver Fern Farms has consistently said we strongly believe in the co-operative model and are open to opportunities which are in the best interests

of Silver Fern Farms’ stakeholders,” Mr Hewett said. “It would appear to confirm Silver Fern Farms’ view that there are material cost benefits from the appropriate coordination of activities in New Zealand, and we remain open to sensibly pursuing these opportunities with like-minded industry participants.”

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