Food manufacturer Goodman Fielder is proposing to close a Hamilton processing plant that employs 125 people, putting jobs at risk.

The NZX-listed firm said it has agreed to proposals to sell its meats and pizza businesses, which make supermarket-aisle brands such as Sizzlers and Leaning Tower.

The transactions are subject to consultations with workers.

If the deals proceed, the meats business - which makes Kiwi bacon, Brooks Deli, Hutton's, Sizzlers and Milano products - would be sold to Hellers. The pizza business, whose main brand is Leaning Tower, would be sold to Mommas Frozen Products.


Under the proposal, Goodman Fielder's meat processing activities in Hamilton would close, with the work shifting to Heller's sites in Christchurch and Auckland. There are 125 workers at the site, in Hamilton suburb of Frankton, and Goodman Fielder chief executive Chris Delaney said the company was consulting with employees impacted by the decision.

"We have had to make the very difficult recommendation to close the facility at Frankton...where possible, (staff) will be provided the opportunity for redeployment to fill vacancies at other Goodman Fielder sites across New Zealand and potentially at Hellers.

"Employees who are not able to be redeployed will receive their full redundancy provisions as well as an employee assistance program, outplacement program and careers workshop.

"We understand the impact these decisions can have on our people and our immediate priority is to ensure that our employees are supported through this process," Delaney said.

"Our strategic commitment is to focus our capital and marketing expenditure on our core categories and our Meats business is not core to Goodman Fielder. The proposal to sell also reflects the very difficult trading environment and market conditions which have existed for the Meats business for some time. We explored a number of alternative possibilities; however, none of these were viable which has led to this decision," he said.

The firm said it expected to make $15 million to $17 million from the sale of the business units, which be used to reduce debt and strengthen the company's financial position.

Subject to consultations with workers, the transactions were expected to be completed on March 31.

The divestment of the businesses would mean a non-cash after-tax impairment charge of between $32 to $36 million as well as an $8 million cash cost.

Delaney said the sale proposals announced today were the "near conclusion of the company's strategy to refocus on its core categories".

"Over the past 18 months, we have successfully prioritised our product portfolio with a number of business divestments, including Integro, NZ Milling, Copperpot and most recently the Biscuits business. On finalisation of the sales of Meats and Pizza businesses, we will have largely completed our divestment programme which will enable the company to focus our resources on our core categories," Delaney said.