Fonterra to close cheese production plant in Kaikoura, New Zealand

New Zealand-based Fonterra Co-operative Group has announced the permanent closure of its Kaikoura cheese facility.

Fonterra New Zealand manufacturing director Mark Leslie said: "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."

Cheese volumes produced at the Kaikoura facility will be distributed between Fonterra’s Lichfield, Clandeboye, Stirling and Whareroa plants.

The cheese production in these facilities is 16% more cost-effective than at Kaikoura, Fonterra stated.

Leslie added: "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.

"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.

"While we obviously would prefer to retain all of our staff, for those who are interested in moving on, we will be providing assistance in their search for new roles outside of the business."

The last day of production at Kaikoura site is expected between mid and late April.

Last year, Fonterra cut 835 jobs as part of its major restructuring programme in the wake of decreasing international dairy prices.

Its business transformation programme was expected to raise annual recurring cash benefits of $340m, reported National Business Review.