Mars Petcare is planning to close its Whanganui factory at the end of 2020, affecting 152 staff.
Mars announced today that it intends to move production of cat food pouches to a facility in Thailand.
The American-owned family company has been operating in Whanganui for 26 years after buying the former Lucky Petfood business in Castlecliff. It held a series of celebrations in May last year for its 25th anniversary. Some staff have been with the company since the Lucky Petfood days.
"It's a sad day for our business, and our focus is on supporting our [staff] and their families right now," Dan Pope, Supply Transformation Lead, said.
"While it's no surprise to our team that the factory has faced challenges in the past few years, it's entirely to the credit of our team that we've been able to continue operating locally as long as we have.
"Despite continued investment, we can't meet the future needs of growing markets in Asia Pacific and it makes sense to consider looking at sites that can deliver the scale and innovation required."
Whanganui mayor Hamish McDouall said it was a disappointing proposal for the entire community.
"My empathy goes out to the staff who will be feeling pretty unsettled," he said.
"But saying that, the one thing is you've got a very committed cohort of staff members who have worked very hard, they know the processes and are a very stable workforce.
"I see this as potential opportunity for another manufacturer to come in and utilise the staff."
McDouall said he didn't expect the proposal to damage Whanganui for other large businesses looking to move to the district
"You've got to look at the fact this is a macro-economic decision, this is a global multi-national and the move is not because the factory is unprofitable, it is profitable, but it's just they can increase profits and scale by moving to Thailand.
"It's understandable in corporate terms but it's just disappointing right now for 150 people."
The Thailand factory would have five times the volume capacity of the Whanganui facility, and be able to supply pouch products to the entire Asia Pacific region, including New Zealand, Mars said in a statement.
The company says it will consult staff and union representatives over the next few weeks.
"If confirmed, all Whanganui [staff] who leave Mars Petcare will be paid their full legal entitlements and redundancy compensation. In addition, extensive retraining, outplacement assistance and counselling will be provided to help transition [staff] on to the next stage in their careers."
Chief executive of Whanganui and Partners, Mark Ward, said in a written statement "first and foremost our response will be around providing ongoing support to staff".
"The early notice of this proposal is helpful. Twelve months gives us time to work with people and I'm confident we can support them in terms of their careers within this timeframe."
The semi-automated manufacturing plant has a 5000sq m factory in Castlecliff. It runs four shifts, seven days a week, with eight-hour and 12-hour shifts on a rotating roster.
Mars has been heavily involved in Whanganui community events and sponsorship.
The company's New Zealand sales operations were not affected by the planned closure, Pope said.