The severe acute respiratory syndrome (Sars) scare, rising New Zealand dollar and an oversupply of mussels to the US have forced Picton's Natural Bridge mussel processing plant to close.
The factory is a significant employer in Picton, with 80 staff.
Half will lose their jobs at the three-year-old plant, while the rest
will be offered work at Marlborough Seafoods in Blenheim.
Natural Bridge general manager Merv Whipp said the plant had run day and night shifts but the night shift was dropped this year. Friday shifts had been stopped in the past two months.
With green lip mussels not selling in Asia due to the Sars scare, product had gone to the US, causing an oversupply.
Prices to producers were falling, affecting the Picton plant.
Nelson-based Wakatu Incorporation owns two-thirds of the plant and since the end of last year 100 per cent of Marlborough Seafoods.
Wakatu chief executive Keith Palmer said employees who had worked for more than a year at Natural Bridge would receive redundancy when the plant closed on May 16.
The plant and its equipment will be mothballed until its future is decided.
The factory closure was a shock for mussel openers Marianne Howell and Joel Wright, of Picton.
"It's really hard. Everything is here for us," said Marianne, who has worked at the mussel processing plant since it opened three years ago.
- NZPA
Herald Feature: SARS
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