KEY POINTS:
The day after it announced the planned closure of its works at Oringi, near Dannevirke, the country's biggest meat processing company has been told by farmers to stop wasting time and identify a clear strategy to improve lamb returns.
PPCS announced on Tuesday it planned the close the
Oringi works, with the loss of 446 jobs.
Chief executive Keith Cooper said sheep numbers were down while processing capacity had increased and the "right-sizing programme" sought to restore the balance.
Yesterday Mr Cooper said restructuring of plants in the South Island would begin "in the near future".
He said the biggest challenge to meat companies was the recent drop in New Zealand's lamb numbers due to many sheep farmers switching to dairying, which offered better returns, and two drought-ridden years which had hurt stock numbers.
Mr Cooper said two competing meat works had opened South Island plants recently, further diluting the stock supply.
But PPCS's decision not to commit to the Alliance Group's mega merger process was criticised at a meeting last night, attended by about 500 shareholders in Gore, The Southland Times reported.
PPCS chairman Eoin Garden defended his co-operative's stance and said it was not the bad guy it had been painted.
The concept of merging five companies into one had been doomed to fail from the start because Alliance had refused to provide a detailed business plan, he said.
"It didn't take us beyond the farm gate."
Mr Garden said PPCS supported the concept of industry rationalisation, but gave no timeframe.
"We have to sit back with cool heads and look at this rationally," he said.
But Balfour farmer Owen Evans said the co-operative had to act quickly.
"This isn't the time to piss around.
"In my 30 years we've had the same problems. How long do we have to wait?" he asked.
Mr Garden said PPCS was working on several strategies to improve the profitability for sheep farmers such as launching a new brand, Silver Fern Farms, on June 1 and rationalising over-capacity of its meat processing plants.
He would not comment on further plant closures.
The Oringi plant had been open for 27 years, with a number of staff spending much of their working lives there.
The closure will cost the company at least $14 million in redundancy payments.
A consultation process has begun with Oringi employees and their representatives and a final decision on the proposed closure was expected within a fortnight.
The news came as a blow to the workers and the Dannevirke community.
- NZPA
