Jobs hang in balance after Takaka blaze

Fonterra workers will get their first chance to inspect the remains of their fire-gutted Takaka factory today.

The jobs of nearly 100 staff hang in the balance after Tuesday night's fire that forced the evacuation of 3000 people in the small upper-South Island town.

Fire had threatened to ignite silos of chemicals and produce mustard gas which would have threatened the lives of residents.

While the situation was quickly brought under control, firefighters were still mopping up yesterday.

Fonterra spokesman John Redwood said staff had been unable to inspect the damage, which meant it was still too early to make any calls about the fate of the Takaka operation.

Fonterra has insurance for the plant but that does not necessarily mean it will be replaced.

A Fonterra factory in Marlborough, which burnt down last year, was insured for $20 million but was not rebuilt because the replacement cost was estimated at up to $55 million.

The Takaka factory was bigger than that and would be likely to cost even more to replace.

Redwood said the factory had been relatively small compared with most of the company's other plants.

Any financial impact on Fonterra's $12 billion export business will almost certainly be negligible.

The factory was not operating as the dairy industry shuts down during the winter months.

Redwood said this meant there would be no impact on product supply or any logistical costs associated with the fire.