Goodman Fielder to sell meat and pizza units in New Zealand

Goodman Fielder, a manufacturer of bread and dairy products in Australia and New Zealand, has agreed proposals to divest its meat and pizza units in New Zealand to Hellers and Mommas Frozen Products.

The proposed plans are part of the company’s strategy to optimise its product and brand portfolio and focus on its core categories where it has market-leading, profitable positions.

Goodman Fielder CEO Chris Delaney said, "On finalisation of the sales of meats and pizza businesses, we will have largely completed our divestment programme which will enable the company to focus our resources on our core categories."

The meats business processes and markets small goods meat products, including Kiwi bacon and ham, Brooks Deli continental meats and bacon, Hutton’s luncheon, bacon and ham, Sizzlers pre-cooked small goods and Milano cooked continental meats, to the New Zealand market.

The sale of the unit is subject to an employee consultation process, which includes transfer of Goodman Fielder’s meat processing operations at its Frankton, Hamilton site to Hellers’ plants in Christchurch and Auckland.

If the transfer plans proceed as proposed, the Frankton site, which employs 125 people, will be closed.

Goodman stated that the decision has been taken after exploring a number of alternative possibilities, and that the meats business has been facing tough trading and market conditions.

Delaney said, "We are consulting directly with employees impacted by this decision. Where possible, they will be provided the opportunity for redeployment to fill vacancies at other Goodman Fielder sites across New Zealand and potentially at Hellers."

Goodman’s proposal for its pizza business is subject to consultation with employees at its Irvines pie factory in South Auckland.

The pizza business primarily produces Leaning Tower branded chilled pizza, including pizza bases and snack-sized frozen pizza.

The transactions are expected to be completed on 31 March 2014 and are expected to fetch up to NZ$17m, which will allow Goodman to reduce net debt and further strengthen its financial position.

Goodman Fielder expects to record a non-cash impairment charge of up to NZ$36m, against the meats and pizza businesses.