Owners of millions of dollars of specialised fruit handling systems are nervously awaiting the shape of a looming restructure by multinational food processor Tomra likely to cost dozens of New Zealand jobs.
The Herald last week revealed the Norwegian company was planning big changes in its New Zealand-based operations as part of a global cost-cutting exercise that could result in about 100 staff lay-offs here. The Herald understands redundancies are expected at manufacturing plants and sales and service sites in Auckland, Hamilton, Tauranga and Hastings.
Announcements on the outcome of the restructure are expected before Christmas. The company has said redundancies won’t take place until the new year.
One of the potential sites is a new $14 million building near Hamilton Airport, built by BBC Technologies, a fruit technology manufacturer that Tomra bought for $66.9m in 2018.
Tomra also owns fruit sorting company Compac Holdings, which supplies crucial systems and equipment to the $2 billion export kiwifruit industry.
Among horticulture businesses worried about service for their Compac systems under the restructure is NZX-listed Seeka, the country’s biggest kiwifruit producer.
Chief executive Michael Franks said the shake-up was a concern for the whole New Zealand horticulture sector.
“We don’t truly know what the new structure is. You’ve got a key provider now in foreign hands that’s going through a restructure process potentially impacting on our servicing and maintenance of our machines.”
“Like everyone else we are waiting for the announcements. We will see what the outcome is, understand the facts and think about some mechanism which protects us, but it is a concern.
“It’s an issue when you have key service businesses push offshore.”
Franks said the changes could remove some equipment servicing.
He said the technology was increasingly complex and a post-harvest handling system cost could cost about $10m. Seeka had more than a dozen such systems.
Seeka may have to bring on more of its own technicians if services were withdrawn or limited.
Tomra, publicly listed on the Oslo stock exchange, announced its cost reduction plan when releasing its third-quarter financial results in late October.
The company plans to simplify its food business and reduce costs by €30m ($53m) and is understood to be cutting about 300 roles globally.
New Zealand appears heavily affected, with Tomra looking to create a regional structure consisting of the Americas and Asia-Pacific and within those regions, merge its fresh and processed sales and service organisations into one team.
“We want to ensure we have the right people in the right place, in the right time zone,” Tomra Food executive vice-president Harald Henriksen said in October.
Founded by Hamish Kennedy in 1984, Tomra subsidiary Compac designs and builds machines to weigh and sort fruit and vegetables, using software, computers, electronics and video cameras to help match fruit ripeness with market delivery.
The company claims its machines are the fastest in the world, with the ability to sort more than 100 pieces a second.
Tomra’s two New Zealand-based businesses claimed wage subsidies for 413 staff during the initial level 4 Covid lockdown in April 2020.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.