Harry Cummins
Updated on: October 14, 2024 7:42 pm GMT
The closure of the Alliance Group’s Smithfield plant in Timaru could devastate the local community, threatening the jobs of approximately 600 workers. This announcement comes as the town braced itself for what civic leaders describe as a “massive” impact on its social and economic fabric. With a history spanning over 30 years, the Smithfield plant’s proposed closure marks a significant shift for a region heavily reliant on its meat processing industry.
Plant Closure Proposal and Its Implications
The potential closure, which Alliance plans to finalize by the end of the year, is based on a decline in livestock availability, particularly sheep. The co-op indicated that changing land use has resulted in fewer sheep, leading to a “significant number” of redundancies if the plan proceeds as proposed. Alliance CEO Willie Wiese explained, “This proposal aims to align our operations with current livestock availability, ensuring we have the right scale and cost structure to meet future demands as a leading red meat processor.”
If the closure is confirmed, operations for sheep meat, calves, and night shift venison processing at the Smithfield plant would cease. Alliance has promised a consultation process with the affected workforce and will explore opportunities for redeployment to its other facilities. However, Wiese acknowledges the likelihood of significant layoffs.
Impact on the Community
Timaru District Mayor Nigel Bowen expressed deep concern over the impending closure, stating, “This is massive. This is a town that has been built on these two freezing works.” The loss of the Smithfield plant would not only result in job cuts but also have broader repercussions on local businesses and the community’s economy.
Nigel Davenport, CEO of Venture Timaru, echoed these sentiments, noting that the closure would create a “cascade effect” within the community of 50,000 residents. “You can talk about the economic impact but it is equally there is the social impact,” he remarked. The plant, a long-standing pillar of the community, is threatened by the decline in livestock farming and the ensuing surplus processing capacity.
Worker Sentiments Amid Uncertainty
As news of the proposal spread, the reactions from the workforce were palpable. One worker at the Smithfield plant described the situation as “the worst,” particularly as many had recently purchased homes and started families. “It’s like it’s just gut-wrenching, heartbreaking,” she shared. The uncertainty surrounding job security and the futures of families has amplified concerns among employees.
Meatworkers Union national secretary Daryl Carran has indicated that a decision on the plant’s fate will be made within two weeks. He noted, “I think we know with the declining stock numbers, that was the main reason for today’s announcement.” The industry has struggled with diminishing livestock and the challenges of sustaining current operations amid lower volume demands.
Financial Context and Future Outlook
Alliance recently reported a staggering loss before tax of $97.9 million for the year ending September 2023, primarily attributed to weakening global markets and changes in land use affecting livestock availability. Wiese indicated that despite the company’s “best efforts,” these challenging market conditions have persisted into 2024. The anticipated decline in sheep numbers and static deer populations further complicates the operational landscape for the company.
Looking ahead, Wiese expressed confidence that processing can be consolidated effectively at Alliance’s other South Island plants, stating, “Therefore, we need to review our South Island processing footprint.” He insisted that maintaining an operational capacity higher than livestock numbers cannot be justified.
Next Steps and Community Response
With the decision on the plant’s future hanging in the balance, Alliance commenced consultations this month to provide employees with clarity before the sheep meat processing season typically resumes in December. Meanwhile, community leaders and union representatives are urging that the emotional and economic toll of this decision be fully considered.
As the clock ticks down to the final decision, community support for the workers remains paramount. Local organizations and leaders are mobilizing to advocate for job security and explore potential avenues to mitigate the social impact of the potential layoffs.
The Smithfield plant’s fate remains uncertain, leaving many in the Timaru community on edge as they await further announcements. For now, the industry and local workforce stand united, hoping for a favorable resolution that preserves their livelihoods and the town’s economic stability.
The case of the Alliance Group and its Smithfield plant serves as a stark reminder of the delicate balance in farming communities between industry demands and local stability. As uncertainty looms, many hope for a future that honors the rich history of the Smithfield plant while adapting to the realities of a changing agricultural landscape.
This story is still developing, and we will keep you updated with new information as it comes in.
