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Silver Fern plans to close Canterbury plant, cut 250 jobs

Tuesday 22nd July 2008

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Silver Fern Farms, the meat cooperative in which PGG Wrightson agreed to buy a 50% stake, plans to close its Canterbury processing plant near Christchurch reflecting the outlook for dwindling livestock numbers.

About 250 jobs will be cut in the latest installment of Silver Fern's "Project Rightsize", which is aimed at ensuring its processing capacity matches demand.

South Island sheep and lamb numbers are expected to fall by 2.2 million units next year, partly reflecting dairy conversions and other land uses of traditional sheep farming country, the company said in a statement.

Chief executive Keith Cooper said the company concurs with Meat and Wool Economic Service predictions that livestock numbers will fall in the next three years. The Canterbury site will bring plant closures to six, including five lamb chains, it said.

Silver Fern, previously known as PPCS, last month announced that Wrightson had agreed to buy a half stake in the company for NZ$220 million, boosting working capital and helping the meat cooperative pay back debt. The agreement needs approval from the 9,000 farmer suppliers that own the cooperative.

Shares of Wrightson fell 0.8% to NZ$2.43. The stock has gained 10% this year, outperforming the NZX 50 Index, which has dropped 22%.

By Jonathan Underhill

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