Silver Fern closure a 'kick in the guts' for Ashburton

The closure of a meat processing plant in Ashburton is being labelled a devastating loss for small-town New Zealand.

Silver Fern Farms is closing its Fairton works in Ashburton, which employs 370 people, and Labour's regional development spokesman Stuart Nash says it's a tragedy.

"It's a real kick in the guts. I was down in Ashburton a couple of weeks ago. They were very proud of the fact they have 2.6 percent unemployment, the place was really going ahead. Funny how things can change so quickly in the space of two weeks."

There will be two weeks of consultation, before a final announcement on job losses is made. Ashburton Mayor Donna Favel admits it's likely to be a formality, with sheep numbers in the district well-down.

"There are 370 staff, and each of them have different stories and each of them have different goals and aspirations," she told The AM Show on Thursday.

"Some may be happy to take redundancy and end their working lives; some will look to leave. We're hoping many will look to stay."

Dairy farms are always hiring, says Ms Favel, often recruiting from other parts of the country and even overseas. There are also other meat processing plants not too far away, and a new supermarket opening in a couple of weeks, with 100 jobs on offer.

"Ultimately, we'd love these people to stay."

She wouldn't comment on suggestions the decision to close the plant was made out of China, following Shanghai Maling's $267 million investment in Silver Fern Farms last year.

CEO confirms dairy conversions to blame

"There has been significant land-use change in Canterbury and Marlborough over the last decade and there are fewer sheep in these regions as they have made way for other uses such as dairy and wine," CEO Dean Hamilton said on Wednesday.

"Whilst it is disappointing to propose closure, we cannot ignore the changes that have occurred."