Blue Sky plant closed until at least November

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Further analysis is needed before Blue Sky Meats decides if and when it will reopen its Gore plant, which closed last November, the company says.

The plant was scheduled to reopen in November this year, chief executive Todd Grave said.

The plant formerly known as Clover Meats, came to a halt late last year because of low financial margins, he said.

The cost of buying beef cattle and global market prices for the product did not result in a profitable margin for the company.

“We did a lot of analysis,” Mr Grave said.

The Gore plant predominantly processed beef, plus some horse and deer.

He would not say how many cattle were processed at the plant annually, as the information was deemed commercially sensitive.

When the plant was in full production it employed about 45 staff, he said.

“Both salary and process workers [from the Gore plant] were all offered secondment to Morton Mains [near Invercargill],” he said. “The majority of them took it up.”

More financial analysis would be carried out before a decision was made to reopen the plant, Mr Grave said.

If the analysis did not stack up, then the company would have to consider its options.

When asked if closure of the Gore plant was among the options, Mr Grave said it was too early to comment on its longer-term future.

“Between now and a possible seasonal restart there is a lot of financial work to be undertaken before reaching any conclusions.”

“The red meat industry is running on very small profit margins,” he said.

“We’re in a commodity market. There’s been some very good years for the plant and there’s been some really bad ones.”

The present global economic climate was challenging for smaller plants, he said.

The company had spent “a considerable amount” of money upgrading the plant last year, bringing it up to customer requirements and technical compliance.

Blue Sky Meats chairman Scott O’Donnell also said the profit margins for beef processed at the plant were not “big enough”.

“I’d like to see it operating every day, so the staff get some wages and the shareholders make money,” Mr O’Donnell said.

Gore plant workers who were working at the Morton Mains plant were learning some new skills, which would be transferable, Mr O’Donnell said.

Gore District Mayor Tracy Hicks said, overall, the overseas red meat market was very competitive.

Another complicating factor could be the fact Blue Sky Meats was going through an ownership change, Mr Hicks said.

If the company decided to close the plant long-term, it would be disappointing for the community and would reinforce the need for the council to look outside the square to find other economic ventures to set up in the South.