David Surveyor, chief executive of Alliance Group, said the investment fits with the company's strategy to boost returns to its farmer shareholders.
"As a 100 per cent farmer-owned co-operative, we can combine the talents of our people with the latest technology such as the primal cutter to lift the efficiency of our livestock processing and deliver the gains back to our shareholders. This technology will result in higher product yields with additional productivity and safety benefits.
"Investments in technology and a commitment to innovation are major drivers in Alliance's Manufacturing Excellence Programme to further build on improving operational performance within the co-operative."
Surveyor said the investment reflects Alliance Group's commitment to its farmer shareholders and the Dannevirke community.
"Our Dannevirke plant is a vital part of our business. We are pleased with its performance and committed to further lifting that performance. Our goal is to lift the performance and productivity of all our plants and ensure we remain the leader in New Zealand red meat production.
"The installation of this technology builds on the previous experience from the other plants by improving the operation of the further processing room," he said.