Silver Fern Farms closes UK operation

‘Silver Fern Farms announces closure of Brooks UK operation’

Silver Fern Farms has announced today the closure of its Brooks (Norwich) operation in the United Kingdom.

Silver Fern Farms took full ownership of Brooks of Norwich, a frozen meat processing facility, in 1998 at a time when New Zealand and Silver Fern Farms were sending significant volumes of frozen carcasses and cuts to the UK for further processing. Since then, the Brooks operation has processed and packed a variety of frozen products which, for logistical or presentational reasons, were unable to be retail-packed at source in New Zealand.

Silver Fern Farms’ Chief Executive Keith Cooper explained that “this position had now reversed with almost all lamb carcasses being further processed in New Zealand at integrated slaughter and processing sites.”

Demand for chilled products has also increased and in recent years major UK retailers have consolidated the processing and packing of chilled meat with a small number of large multi-species operators.

Mr Cooper said this combination of factors had necessitated a review of the Brooks operation. “The closure is a result of the continued decline in frozen exports from New Zealand due to lower numbers of stock available for slaughter and our focus on achieving a best practice chilled supply chain model, which has resulted in significantly reduced volumes available for processing through the Brooks operation”.

“We continue to observe a major shift in consumption from frozen to chilled product as a result of changing lifestyles and increasing consumer demand for fresh, healthy and convenient added-value products”, said Cooper. The UK in particular is leading this trend – in 2009 chilled lamb exports from New Zealand grew by 20% and Silver Fern Farms’ chilled growth in was significantly higher than this.

“As part of the journey towards realising Silver Fern Farms’ vision to become a fully integrated market led company, we are partnering with major UK retailers to support their focus on chilled and this has had a flow-on impact on our frozen volumes. We remain committed to aligning the footprint of our business to meet the expectations of the market, our customers and consumers, despite the fact that this may require some difficult decisions to be taken along the way.”

The company informed Brooks’ employees of the closure of the Norwich-based plant today. There will be 64 employees affected by the closure which will come into effect immediately.

Over the last three years, Silver Fern Farms has significantly restructured its UK operations to improve operational efficiencies and achieve cost savings in light of the trend away from frozen towards chilled product. The Brooks plant was sold two years ago and has been operating under a lease arrangement since this time. “We wish to recognise the professional contribution that our Brooks’ staff have made over this period but unfortunately, based on current and projected throughputs, the Brooks plant is no longer commercially viable and the company cannot continue to support a loss-making enterprise.” said Mr Cooper.

“We understand the impact that this decision is likely to have on our employees, their families and the local community and we will be making every practical effort to support them through this difficult period” said Mr Cooper.

Silver Fern Farms will retain its marketing and logistics operation in the UK, which will continue to provide full customer service support to its existing chilled and wholesale customer base throughout the UK and elsewhere.

ENDS

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