Key Points:

Emotions ran high today as workers were told that PPCS planned to close its Oringi sheep processing plant near Dannevirke.

Workers at the southern Hawke's Bay works, which employs 466 staff, were told by PPCS chief executive Keith Cooper of the decision at a meeting at the plant this morning.

Mr Cooper said the proposed closure was part of the company's "right-sizing programme" - aimed at aligning the company's processing capacity to current and projected livestock availability.

"Today we began a consultation process with our employees and their representatives at the plant. A final decision is expected within the next fortnight once that process has concluded," he said.

"We understand that this news is unwelcome for our employees, their families and the Dannevirke community.

Staff had feared the worst when called to meet the plant today.

Worker Jimmy Sciascia was at the meeting, and said it was a full house.

"There were a lot of angry people," he said. "Very emotional, and they were showing that by the comments they were making to the CEO."

Despite the news being expected it was still a blow, he said.

" It is for me, but I think it will be more of a blow for the people that have been working there for 20 to 30 years, or even the guys that have been there from the very start, it will affect them the most."

Mr Sciascia said many of the workers had been there for many years, "and they're very family orientated as well".

He said most people lived locally and workers were questioning why they didn't close the Takapau plant instead, which would have less impact on the town.

"The workers got angry about that because it was a financial decision, it wasn't a decision based upon the community and the best interests of the people."

Mr Cooper said the decision followed "a careful review of our sheep processing operations, livestock trends and industry processing capacity".

"This is an industry that is suffering from poor returns and the threat of alternative land uses, and PPCS must and will continue to make hard decisions to give security to the business and its farmer-shareholders going forward."

PPCS Oringi is currently in seasonal shutdown following the end of the main livestock processing season, October to March.

Mr Cooper said that, under the proposal, the Oringi processing facility would not reopen and the plant would be decommissioned, a process expected to take around six months.

"A lot of people have gone out and got other things to do while it's the off season, but I don't think they were counting on not coming back at all," Mr Sciascia said.

He was working in forestry but had planned to return to the works.

"It's pretty sad because it's the kind of job you can just walk into without any major qualifications and you're on a good rate of money."

He, like his colleagues, would now be forced to re-evaluate his future.

Mr Cooper said if PPCS Oringi did close the company would "make every practical effort to assist our employees through the change and where possible offer alternative employment at our other processing facilities where vacancies exist".

The proposal to close the site reflected the trend of declining sheep numbers and increasing sheep processing capacity in the North Island during a period of sustained strength in the New Zealand dollar, he said.

"Over the next three years, sheep numbers in the North Island are expected to drop by more than 500,000, while in the past two years industry processing capacity has been increased by an additional two million head, in the main by Alliance in Dannevirke and CMP in Marton."

Mr Cooper said the proposed closure was no reflection on the commitment and skill of the workers at Oringi.

"However the actual cost of production at the site was not competitive or sustainable."

The company was evaluating the future of operations across the business.

The Rightsize programme was part of the company's strategy to return PPCS to its traditional profitability over the next 18 months, he said.

From next season, starting in October 2008, all PPCS' North Island sheep processing would occur at its Takapau (Hawke's Bay) and Waitotora (near Wanganui) facilities.

The closure was likely to be a huge blow to Dannevirke, with the district still recovering from job losses at the Norsewear clothing plant in 2007 and the Feltex carpet plant in 2006.

New Zealand Meat Workers and Related Trades Union Incorporated general secretary Dave Eastlake said today the union expected more closures around the country in the coming months.

"We are aware there has been a reduction in stock numbers, so we are aware that some closures would be inevitable."

He said the workers were disappointed but remained realistic that they had to move on.

Mr Eastlake said the workers needed a final decision to be made.

Union representatives would be available at the plant for workers.

Tararua District Mayor Maureen Reynolds said PPCS' decision to close the plant was "devastating".

It had always been a worry for the district, Ms Reynolds said.

"If there is anything sure in the meat industry it is change."

She said the decision "came out of the blue" and would be dreadful for the workers.

The closing of the plant would have "huge effect" on the community.