The initial aim of the $16.7 million six-year project was to develop an automated process to replace the labour-intensive removal of the pelt and internal organs from sheep using sensing and robotic technology.
This could eventually replace 18 people on each processing chain but not necessarily mean job losses.
Meat Industry Association chief executive Tim Ritchie said the meat industry employed 23,000 at the peak of the season, but it was struggling to find enough staff to man its plants.
"As well as tackling the shortage, the project will make jobs in the meat industry more attractive," he said.
Productivity gains from the technology are estimated to save the industry $43 million within five years.
Realcold Millers Mechanical operations manager Bruce Muldrew said the project would provide work for the company's 70 staff employed in Dunedin, in what was a traditionally cyclical business.
The company has for 50 years specialised in developing meat industry processing systems, which it exported around the world.
Mr Muldrew said the company had the licence to technology previously developed by the former Meat Industry Research Institute of New Zealand (MIRINZ), and some of those prototypes would form the basis of the new technology.
Industrial Research Ltd would also be involved in developing the new automated systems.
The Ovine Automation Ltd (OAL) consortium has attracted $8.36 million over three years from the Foundation for Research Science and Technology, with the balance coming from the Meat Industry Association and nine meat companies: Silver Fern Farms, Alliance Group, ANZCO, Taylor Preston, Progressive Meats, Bernard Matthews, Crusader Meats, Auckland Meat Processors and Blue Sky Meats.
A notable company missing from the consortium was Affco, one of the four largest players in the New Zealand meat industry.
Affco chief executive Stuart Weston did not return calls yesterday.
The Foundation for Research Science and Technology was already investing in another automation joint venture between Silver Fern Farms and Dunedin-based Scott Technology, which was developing automated lamb-boning technology.
OAL manager Richard McColl said the two projects complemented each other but were completely separate initiatives and focused on different stages of the processing process.
The OAL consortium had chosen early stage processing because some research had already been done on that area, but also because it was identified as providing a major gain for the industry.
He hoped commercially viable processes could be ready within 12 to 18 months, after which OAL would look at automating other areas of the slaughter board.
