March 16, 2016

Fonterra confirms Kaikoura site closure

Fonterra Co-operative Group Limited has confirmed the permanent closure of its Kaikoura site in New Zealand, following the conclusion of staff consultation.

Mark Leslie, Director for New Zealand Manufacturing, said the decision has not been made lightly.

"While it is difficult for the people involved, we have a responsibility to our farmer shareholders and unit holders, and our customers to be as efficient as possible across our business, especially given the low milk price," Leslie commented.

Kaikoura's cheese volumes will be split between Fonterra's Lichfield, Clandeboye, Stirling and Whareroa cheese plants, where cheese production is up to 16% more cost effective than at Kaikoura.

According to Leslie, the Co-operative has a long history in Kaikoura and staff and farmers feel a strong connection with the site.

"We are conscious that this is a difficult time for some local farmers, staff and their families, and the wider Kaikoura community. We are doing what we can to support them through this change," he added. "Based on consultation, around half of the site staff have indicated their interest in redeployment elsewhere in the Co-operative, and we are confident we will be able to meet their wishes."

The final day for processing at the site is expected in mid to late April.