Fonterra jobs on the line at Waikato packing plant

Fonterra staff comfort each other after a meeting that announced up to 110 jobs could go after Fonterra confirms restructuring at its Canpac plant. Photo / Christine Cornege

Around 110 jobs are likely to lose their jobs at Fonterra's Canpac plant in Waikato as it changes its focus.

The company said it was "realigning" its packing operations at the plant to focus more on paediatric nutritionals.

This would mean Canpac would move to operating 24 hours a day, Monday-to-Friday, instead of the current seven day- a-week operation.

The changes could mean around 110 of the 330 jobs at the plant may not be needed.

"We've undertaken a thorough review of the site and looked at where to focus the business after some of Canpac's volume was reduced, and have been considering options to make the site run more efficiently and a better fit with our strategy," Fonterra director of NZ operations Robert Spurway said.

"This is not a decision we have taken lightly and we are working through a consultation process with our people around the proposal.

"This will be a blow for our people and we will do everything we can to work with them to find new opportunities at our other sites in the Waikato and further afield should they need them."

Staff members gathered at the Kingsgate Hotel in Hamilton today where a senior executive told them the plant was running below capacity and changes were needed.

They emerged from the meeting downcast and refused to speak with media, saying confidentiality agreements with their employer prevented them from doing so.

Mr Spurway said the changes had nothing to do with last year's botulism scare but were more about simplifying the business including its range of products to make it more efficient.

"We are running below capacity so this is about us being clear about what we face in the future," said Mr Spurway.

"There's no surprise for many of the staff, one of the things that was apparent to the team was that they were running below capacity and that needed to change."

Mr Spurway said there would be changes "right across the board", affecting staff on the plant floor to people in senior management positions.

He said a formal consultation with staff would likely begin next week and expected the proposed changes to be enacted by late next month or early September.

Staff at the plant packaged and canned infant formula and milk products but Mr Spurway said changes could also see the plant focus more on paediatric products and high value-added products.

Canpac is Fonterra's largest secondary packager of milk powders, and supplies branded nutritional powders, bulk blended nutritional milk powders, cans and can components around the world.

In May, Fonterra flagged $400 million to $500 million of additional capital spending over the next three or four years building new capacity to reduce product mix constraints, including two new milk powder plants.

Last year, it embarked on a savings drive to strip out up to $65 million a year by eliminating 300 jobs, centralising services, cutting duplication and simplifying management structures.

Units in the Fonterra Shareholders' Fund were unchanged at $5.99, and have increased 3.3 percent this year.

- Additional reporting James Ihaka, BusinessDesk