Sanford Chief Executive Volker Kuntzsch said that consultations with Sanford Christchurch employees have started to discuss the potential closure of the Christchurch plant.
He said that recent weather patterns have hit natural spat (offspring) supply for successive seasons to a point that means it have become necessary to address mussel processing in a more effective manner.
The company said that wild spat supply is the single biggest constraint on the mussel industry with current spat shortages limiting future crop supply.
In the long term Sanford’s recent investment with government, industry and research organisations in the selective breeding of mussels will alleviate the industry’s reliance on wild caught spat, the company said.
However, at this stage it is not anticipated that these initiatives will have a consequential impact on crop supply such that Sanford’s South Island plants are able to be efficiently utilised for the next two to three years.
In a statement to the New Zealand Stock Exchange Sanford said that given the outlook of Greenshell mussel crop supply in the short to medium term there is a need to improve the capacity utilisation across processing locations in the South Island.
However, the decision to close the plant has brought criticism of the New Zealand government from the opposition Labour party that believes more should have been done to save the plant.
“Sanford is considering closure after a decline in the natural supply of spat. This is going to put 232 jobs at risk in Christchurch,” Rino Tirikatene for the Labour party said.
"The mussel industry relies on spat, very young shellfish which are collected from beaches mainly in the Far North.
“We might have been at the stage where we could farm spat if the government had not removed incentives to invest in research and development in its first term.
"Research and development spending in New Zealand continues to fall below the OECD average after National removed Labour's research and development tax credits. The government can do more to protect jobs by creating incentives to invest in industries like aquaculture.
“In the meantime the government can direct the Crown Research Institutes to study the development of spat farming in an effort to protect the remaining jobs in the industry,” Rino Tirikatene added.
“Labour is standing by the Sanford workers at this difficult time and I will seek talks with the company, and Aquaculture New Zealand and Seafood New Zealand.”
Sanford operates a manual opening plant in Christchurch and an automated facility in Havelock, in close proximity to the mussel farms in the Marlborough Sounds.
Combining the volumes in one plant would eliminate the strong likelihood of intermittent processing interruptions, unpredictable shift patterns and two sub optimal manufacturing environments. This would also facilitate some level of protection against current pricing in international mussel markets, limiting the impact on the contribution mussels make to Sanford’s performance.
“We are now consulting with our Christchurch employees, as well as with Government agencies and Christchurch civic, community and business leaders, over alternative employment prospects for our employees should the closure become reality,” Mr Kuntzsch said.
“Should the Christchurch plant close, we will attempt to redeploy as many staff as possible within Sanford’s other plants and fleet operations throughout the Group. If this is the outcome, we would also like to assist the process of identifying alternative employment options within Christchurch by liaising with major employers in the Canterbury area who may have suitable vacancies for our staff members.”
The site in Christchurch became part of Sanford’s operations with the acquisition of Pacifica Seafoods in 2010.
