Whanganui business Tasman Tanning has purchased New Zealand Light Leathers' Washdyke Tannery in Timaru.
Tasman Tanning is New Zealand's largest producer of finished leather, and the purchase was made in December.
It is strategic because it secures the future of the Washdyke site, which will trade as Tasman Tanning South Island Limited.
The employees of New Zealand Light Leathers Limited have transferred to the new company.
"The acquisition will also give Tasman Tanning access to South Island wet blue hides to support growth in finished leather production at its Whanganui site", Tasman Tanning chairman Hunter Tait said.
Tasman Tanning's investment adds 60-plus years of experience in the leather industry and capital to the Washdyke site.
This will enable it to expand its production capabilities and further enhance its development into a strategic South Island hub, processing hides, skins and pelts from its meat industry partners.
Tasman Tanning South Island's CEO David Cassidy said it was an exciting time for the operation. The new ownership would allow it to not only increase production but also make it the preferred supplier for hide and skin processing in the South Island.