Talk had swirled over the future of the 139-year-old plant over the past six months but the worst nightmares for many came to fruition yesterday with the plant falling victim to over-capacity in the industry, declining stock numbers and a poor financial performance from the meat company.
There was little obvious surprise at the announcement, although some emotion was evident outside as workers processed the news.
Silence came across the room as Alliance safety and processing general manager Wayne Shaw announced the closure.
One worker when asked whether it was a surprise said "not really".
Most staff quickly left the meeting.
New Zealand Meatworkers Union Canterbury senior organiser Bill Watt said it was a shocking day for what was a very efficient plant.
"Obviously Alliance had a very poor result last year, losing nearly $100 million. Yet other companies seemed to make $60m", he said.
"Alliance have made some mistakes and we have had to pay for it."
He said workers would take a while to decipher the decision and the enormity of it.
"The economy is not going that well and now we have 600 people without jobs."
He said there was no real anger from workers after the meeting but they were just getting their heads round it.
"They are good well-paid jobs and not just for Timaru — it is the whole of South Canterbury. Millions not coming into the community any more."
It was a plant which processed sheep, lambs, venison and bobby calves.
Changing land use impacted workers.
"They say with trees every hectare creates one job while with stock it is seven people per hectare. And you can’t eat trees can you?"
Timaru Mayor Nigel Bowen said it was a very sad day for the town.
"It is a really rough time for many people. I have friends who I went to school with and have known for a long time who work there", he said.
"Though there was some expectation this was going to happen the outcome was still pretty tough.
"There were couples who both worked there which were facing both being out of work."
Mr Bowen said 180 who had finished up in April had registered with the Ministry of Social Development and 100 of those had gone off MSD books.
Manufacturing was strong in the Washdyke area, so some people could be taken on but nowhere near 600, Mr Bowen said.
Alliance planned to make a final decision on October 18. The final day shift for venison would wind down by the end of the year and the plant would shut.
Staff would be offered redeployment to other Alliance plants, however, the company anticipated large numbers of redundancies.
Timaru District Council records show the plant’s 32.13ha site has a capital value of just over $36m, with the land value $3.2m.
Alliance reported a $97.9m loss for the last year, blaming weak global markets, lower livestock rates and inflationary pressures.
The company believed its other three South Island plants — Pukeuri (Oamaru), Lorneville (Invercargill) and a newer plant in Nelson, could accommodate processing requirements.
"Smithfield is 139 years old, the oldest site, and needs significant investment in repairs and maintenance", Mr Shaw said.
"This proposal is no reflection on you or your work. But declining livestock numbers mean something needs to change."
- By Claire Allison, additional reporting by Steve Hepburn
