Silver Fern Farms is planning to close its Ashburton sheep meat plant - affecting 370 workers.
The workers at the Fairton processing plant were told of the proposed closure at a meeting held by the meatworks company today.
The company has blamed a "continued decline in regional sheep numbers" for the closure.
Silver Fern chief executive Dean Hamilton told Checkpoint with John Campbell the board approved the proposal one month ago.
"I think this is the economic reality of what's happened to the industry over the last 10 years. It's a very disappointing day to stand there and say that we would intend to close this plant."
Mr Hamilton said a final decision on the closure would be made in two weeks.
The Meat Workers Union said workers were devastated after today's announcement.
"Despite the workers fearing the worst for months, they always hope for the best," said national secretary Graham Cooke.
"This is tragic for these meat workers and the Ashburton community, with the loss of another 300 good jobs in the meat industry."
Paul, one of the plant's slaughtermen who would lose his job in the proposed closure, told RNZ the decision was not a surprise.
"It's been in the pipeline for the last couple of years. You can't do much about it, can you? If the stock numbers aren't there, they're not there.
"So I'll probably start up a small business, go and do something for myself now that I'm out of there. Get my redundancy and my super and move on."
Another worker said she did not know what she would do now.
"It's quite sad. Sad for Ashburton. This is my first season here, but that's life these days. I'll make sure my husband keeps working."
Ashburton District mayor Donna Favel said she was deeply saddened by the announcement, and the community needed to look out for people who were struggling with repercussions of the proposed closure and might need support.
The conversion of many farms from sheep to dairy had increased overall employment in the district, Ms Favel said - but the downside was the reduced need for sheep meat processing, which had taken its toll on plants like that at Fairton.
Shift to Pareora on the way - Silver Fern Farms
In a statement, Mr Hamilton said the company was looking to process more numbers at its nearby Pareora site.
"There has been significant land-use change in Canterbury and Marlborough over the last decade and there are fewer sheep farms in these regions as they have made way for other uses such as dairy and wine.
"Higher returns from land-use conversion and periods of drought in these regions have contributed to this decline in sheep numbers. While our beef processing volumes have risen significantly over this period, the lamb numbers available have steadily decreased.
"Fairton was consistently processing over 1 million lambs prior to 2010. Last season we processed under 500,000 lambs. This year that has continued to decline and we processed just over 325,000 in a six month seasonal operation."
He said Silver Fern Farms expected sheep numbers to "consolidate around current levels" rather than expand in the foreseeable future, and it made economic sense to shift the work to Pareora, where the company recently invested $7 million to add to its capability.
Mr Hamilton said support was being offered to the 370 people at Fairton.
"We understand this will have a significant impact on our people at Fairton as they work through the consultation process and weigh their options. Whilst it is disappointing to propose closure, we cannot ignore the changes that have occurred.
"We have set up support for our people through this period, and if the decision is reached to close we will assist them with opportunities at our other sites across the business."
