Dunedin-based meat processor Silver Fern Farms has confirmed that it will close its Fairton sheepmeat processing plant following a continued decline in regional sheep numbers, with the loss of 370 jobs.

Chief executive Dean Hamilton said support is being offered to the 370 people at the Ashburton plant affected by the closure.

"We understand this decision will have a significant impact on our people at Fairton," he said in a statement.

"Today has obviously been a difficult day. However, we cannot ignore the large decline which has happened to sheep numbers in this region as a result of progressive land use changes over the last 10 years," he said.


Silver Fern will be paying redundancy to all affected staff.

"In addition, we have 230 roles available for them at our other sites, should they wish to take them up", he said.

"The closure is not the fault of our staff at Fairton - we value their skills and would welcome the chance to retain them within Silver Fern Farms," he said.

Silver Fern Farms will continue to operate its pelthouse operation from the site, which services its other three sheepmeat plants in the South Island.

Higher returns from land-use conversion, and periods of drought in Canterbury and Marlborough had contributed to a decline in sheep numbers.

While beef processing volumes had risen significantly over this period, the lamb numbers available had steadily decreased.

Fairton was consistently processing more than 1 million lambs prior to 2010. Last season, the plant processed fewer than 500,000 lambs.

This year that had continued to decline and the company had processed just more than 325,000 in a six-month seasonal operation.


Last year China's Shanghai Maling bought a controlling stake in Silver Fern Farms, paying $267 million in cash for 50 per cent.

The sale, which was opposed by a group of dissident farmers and the New Zealand First Party, was approved by the government in September on the recommendation of the Overseas Investment Office.