Smithfield meatworks closure: Fears impact could hit hard for years

It could be months or even years before the full impact of the closure of Timaru's Smithfield meat processing plant becomes clear, according to one community advocate.

Carolyn Cooper, the chief executive of the region's largest social services provider, Presbyterian Support South Canterbury, said the loss of 600 jobs could take a toll for years to come.

The organisation had been gearing up in anticipation of Friday's announcement, readying food banks and ensuring counselling services were in place, Cooper said.

She had lived in the area for more than 20 years, and could not remember a larger lay-off.

"It's not like there's another company out there ready to pick up another 600 workers.

"It's going to be tough for a while. Timaru's got plenty of empty shops as it is."

Many families were already finding it difficult to meet cost-of-living pressures, and there would also be an impact on the housing and rental markets, Cooper said.

The 600 affected workers represented "a couple of thousand people" once their families were taken into account.

There were husbands and wives working together, as well as multiple generations from some families.

"It's just going to be difficult for the next 12 months, two years - potentially longer, it's just hard to know."

The farmer-owned cooperative Alliance Group - the country's largest processor and exporter of sheepmeat - warned workers in September of a proposal to close the plant. The company said the closure was partly due to land use shifting to forestry and carbon farming removing swathes of beef and sheep farmland and leading to excess processing capacity.

The New Zealand Forest Owners Association has disputed the claim afforestation was to blame for Smithfield's closure.

The co-op, which took over the 139-year-old plant in 1989, reported a before tax loss of $97.9 million for the year ending September 2023.

But Friday's announcement still came as a shock to many, Pasifika O Aoraki Services general manager Mike Sceats said.

While there had been rumours circulating for months, some workers were anticipating a reduction in production or services, or a negotiation of lower pay rates.

"A complete shutdown has certainly come as a shock."

Around a third of the plant's workers were from the town's fast-growing Pacific community, which meant the financial impact would go beyond Timaru and even the wider region.

Many sent money home to the islands "and those demands will still keep coming", Sceats said.

The majority of the Pacific workers were recently arrived migrants, who would now find themselves servicing significant amounts of high interest debt, having borrowed from second- and third-tier lenders to get set up in their new homeland.

Their situations were further complicated by a lack of English language and financial literacy, being semi- or non-skilled, and not being familiar with local services and agencies, he said.

While Alliance said there would be some positions available at its Pukeuri Plant just outside Oamaru, a smaller meat processor, Lean Meats Oamaru, had recently shed nearly 100 jobs, meaning competition for those jobs would be high, Sceats said.

The number of vacancies he had heard about came nowhere near the numbers lost at Smithfield and while there were Australian recruiters in town, it was unclear whether workers from the Pacific would satisfy Australian visa requirements.

One of the region's largest employers, the Smithfield plant had been "an integral part" of the South Canterbury economy, South Canterbury Chamber of Commerce chief executive Wendy Smith said.

She was heartened a number of other businesses in the region had already been in touch with job opportunities, alongside the meat processing positions available in Oamaru and Ashburton.

It was too soon to know exactly how many jobs would be available, but she hoped a "large number" of the laid-off workers could be redeployed without having to leave town.

Alliance had committed to providing transport for those able to secure new positions at the Pukeuri plant, which was about an hour away, she said.

Call for review of forestry incentives

Smith anticipated the closure would correct the meat processing capacity oversupply and prevent further plants in the region being affected, but wanted to see the government "take a closer look" at forestry incentives.

"It is a concern that good farming land has been used for the carbon side of things.

"The world is always going to need food. We're a food producing nation, here in South Canterbury we have the added manufacturing and processing, so it's fundamental for us."

The national network of chambers of commerce had also taken up the issue, and she hoped to be having "more conversations with the government along these lines".

Labour's Rural Communities spokesperson, former Rangitata MP Jo Luxton, said the announcement was "devastating" for the region, but had seemed inevitable in recent weeks.

The focus had to be on supporting the workers and their families at this stage, although the wider economic impact would be "massive".

"That's 600 people who shop locally, get their groceries, go to the dairy, purchase homes, have children in school. I think it's going to be bigger than a lot of us realise."

Some employees had been at the plant for decades, and with only a limited number of other meat processing roles nearby could find switching careers difficult, while some families had both parents working at Smithfield.

The closure came on the back of Timaru's loss of a vaunted Scott Base rebuild contract which was confirmed in late August, following a cost blow out and subsequent redesign. The contract would have seen the town play a pivotal role in constructing and shipping New Zealand's new Antarctic research base.

She had no doubt people would leave the area, potentially for Australia.

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