Palmerston North gets the pies in Goodman Fielder rejig that will shutter two South Auckland factories

Goodman Fielder plans to close two factories in Auckland, consolidating their production to a single site and shifting its pie-making operation to Palmerston North as part of an ongoing efficiency drive in what it calls "a very competitive market".

The diversified manufacturer owned by Singapore-based Wilmar International and Hong Kong-listed investment firm First Pacific Co will close its Irvines bakery at Wiri and its Hot Plate bakery in East Tamaki. The Irvines line will relocate to Palmerston North while production at Hot Plate will be consolidated to Goodman's larger Quality Bakers Auckland facility. Some 147 workers are affected by the company's plans, which include automating some warehousing functions in Auckland and Christchurch.

Goodman Fielder New Zealand managing director Tim Deane said the company's new owners "are taking a very long-term view" investing in some plants and closing others. The net impact on the workforce may be smaller because 60 new jobs would be created at its Ernest Adams plant in Palmerston North and 25 at the expanded Quality Bakers Auckland site, he said.

"Both the Ernest Adams and Irvines businesses will be much more sustainable in the longer term," Deane told BusinessDesk.

Goodman Fielder delisted in March 2015 following the takeover by Wilmar, an agribusiness group that is the world's largest palm oil producer, and First Pacific. Deane said the company won't comment on its performance as a private company in New Zealand since then.

Goodman Fielder NZ's financial statements for calendar 2016 show revenue was $870.6 million, generating a profit of $29.3 million. The latest year included $5 million of site closure and restructuring costs. Its 2015 numbers are for the six months to Dec. 31, when it had sales of $432 million and profit of $9.8 million.

The company didn't declare a dividend and said revenue, cost of sales, warehousing and distribution costs, sales and marketing were "broadly in line with the prior six months anualised".

General and administration costs of $46.9 million were 9.9 percent higher than in the year-earlier annualised period, which reflected the site closure and restructuring costs.

Deane did say that the biggest change in the latest year was the increase in the price of milk - a raw material cost for the dairy, baking and grocery maker. Goodman Fielder passed on those cost increases where it could, he said.

Deane said the new owners have invested $80 million in the New Zealand business since 2015 and has another $150 million of investment planned. The investment includes the planned installation of auto picking technology at Quality Bakers and its milk bottling plant on Blenheim Rd in Christchurch. The auto picking would replace drivers with forklifts, essentially a robotic system that would gather up product to fill orders from its cool stores and warehouses ready for dispatch.

"We're investing in key sites to ensure we remain competitive," he said.

Goodman Fielder currently has 14 manufacturing sites in New Zealand and employs about 2,000 people, according to its website. Its range of household brands include Meadowlea margarine, Meadow Fresh milk, Vogels, Molenberg, Tararua Dairy, Chesdale, Irvines, Ernest Adams, Olivani and Puhoi Valley.

(BusinessDesk)