Fonterra closes century-old Kaikoura factory

Fonterra closes century-old Kaikoura factory

Dairy giant Fonterra has confirmed it will close its Kaikoura cheese factory, which will see around 30 full-time jobs scrapped.

The co-operative's been mulling the closure for months, as it tries to cut costs amid sliding dairy prices.

The factory's been operating in the small South Island seaside town for more than a century, but Fonterra says it's operating costs are too high, averaging around 16 percent more than similar plants.

It also needs significant capital expenditure, which added weight to Fonterra's decision to shut the factory's doors for good.

Staff will be offered jobs at other factories around the country, but the company admits many will want to stay put in Kaikoura.

Fonterra manufacturing director Mark Leslie says the company needs to be efficient as possible given the climate of low milk prices.

"While it is difficult for the people involved, we have a responsibility to our farmer shareholders and unit holders, and our customers."

The site processes 245,000 litres of milk each day, which equates to 28 tonnes of cheese. Mr Leslie says that volume will now be split between Fonterra's Lichfield, Clandeboye, Stirling and Whareroa cheese factories.

Local MP Stuart Smith is gutted for the community and is disappointed the dairy giant came to the conclusion it did. But he hopes there's a silver lining for the small East Coast town.

"The question now is what they do with the factory itself. My hope is they put it up for sale so hopefully someone else can take it on," he says.

The factory will close in the middle of next month.


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