Fonterra to lay off up to 110 staff at Waikato packing facility

Wednesday 23rd July 2014

Fonterra Cooperative Group, the world's biggest dairy exporter, may lay off a third of its workers at the Canpac packing facility in Waikato, which it plans to focus on paediatric nutritional products.

The Auckland-based company will scale back operations at the plant to five-days-a-week from its current seven days, and may cut 110 of the 330 staff employed at the site, after volumes at the plant were reduced, it said in a statement. It will look to fill jobs at other sites with affected staff, it said.

"This is not a decision we have taken lightly and we are working through a consultation process with our people around the proposal," Robert Spurway, Fonterra director of NZ operations, said. "We are continuing looking at where we can further invest in the Waikato, but have to make decisions based on what aligns with Fonterra’s strategy and will drive the greatest returns to our farmer-shareholders."

The plant is Fonterra's largest secondary packager of milk powders, and supplies branded nutritional powders, bulk blended nutritional milk powders, cans and can components to customers across the globe, according to its website.

In May, Fonterra flagged $400 million to $500 million of additional capital spending over the next three or four years building new capacity to reduce product mix constraints, including two new milk powder plants.

Last year, it embarked on a savings drive to strip out up to $65 million a year by eliminating 300 jobs, centralising services, cutting duplication and simplifying management structures.

Units in the Fonterra Shareholders' Fund were unchanged at $5.99, and have increased 3.3 percent this year.

BusinessDesk.co.nz

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