Alliance Group to Close Smithfield Plant Amid Declining Sheep Numbers

Highlights:

• Closure Announcement: Alliance Group Limited (ASX: ALN) confirmed the closure of its Smithfield plant in South Canterbury due to declining sheep numbers, which have resulted in an oversupply within its network.
• Operational Impact: The Smithfield facility, primarily processing sheep along with some venison and calves, has already ceased night-shift venison seasonal processing, impacting the local agricultural economy and workforce.
• Commitment to Employees: Alliance Group is committed to supporting affected workers during the transition, as it focuses on optimizing operations and adapting to the changing demands of the meat market.

South Canterbury Facility Set to Shut Down

Alliance Group Limited (ASX: ALN), New Zealand's only fully farmer-owned meat cooperative, has officially confirmed the closure of its Smithfield plant in South Canterbury. The decision follows a consultation period that concluded on October 11, 2024. The company attributed the closure to a significant decline in sheep numbers, resulting in an oversupply within its processing network.

Impact on Operations and Workforce

The Smithfield plant, strategically located near Timaru, primarily processed sheep but also handled venison and calves. As sheep and calf processing operations are phased out, the facility has already halted night-shift venison seasonal processing. The move reflects ongoing challenges within the agricultural sector, highlighting the impact of reduced livestock numbers on local meat processing capabilities.

Future Outlook and Challenges

At the time of writing, the closure poses a considerable challenge for the local economy and the workforce, with potential job losses affecting numerous families in the region. Alliance Group has stated its commitment to supporting affected employees as the transition unfolds.

This decision comes as the cooperative aims to streamline its operations and ensure the sustainability of its remaining facilities. The company is focused on optimizing its processing capacity while addressing the evolving demands of the meat market.

Alliance Group's leadership remains hopeful about future opportunities within the industry, emphasizing the need for adaptive strategies in response to fluctuating livestock populations. The closure of the Smithfield plant underscores broader trends in New Zealand's agricultural landscape, marking a significant shift for the farmer-owned cooperative as it navigates these challenges.

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