After recently cutting operations to one shift a day, Ridley Corporation is to close one of its two South Australian stockfeed mills, at Murray Bridge, saying it is costing the business $1.5 million annually.
Ridley Agriproducts was notified earlier this year it would lose a supply contract for poultry giant, Ingham's, this month.
Ingham's opened a new feed mill of its own at nearby Brinkley in February as part of a $279m expansion to its feed processing and poultry farming operations in SA.
Despite reassuring locals in August of Ridley's longer-term investment plans for the site, the company said the mill's shutdown would be effective in a month's time, on October 25
The closure is understood to involve 13 staff.
While it is disappointing to have to close this feed mill, the annualised cash drain on the Ridley Group is in the vicinity of $1.5 million
The Murray Bridge plant produces bagged poultry, dairy, horse and lifestyle animal feeds, plus pellet meals, concentrates and pre-mix ingredients for the poultry and pig industry.
Newly-appointed managing director, Quinton Hildebrand, who recently moved from Ingham's, said operations at Murray Bridge would transfer to the company's Wasleys mill, north of Adelaide.
"While it is disappointing to have to close this feed mill, the annualised cash drain on the Ridley Group is in the vicinity of $1.5 million," he said.
"Employees have been informed of the decision and wherever possible will be offered alternative employment with Ridley at other sites."
The prominent Murray Bridge facility, which overlooks a new shopping complex in the town, was expected to be sold in the "medium term".
Based on likely divestment costs and redundancy and remediation requirements, Mr Hildebrand said the total restructuring cost in SA would be about $6.1m.
"As part of a co-ordinated and orderly closure customers currently serviced from the Murray Bridge site are being advised of plans to transition their feed production to the Wasleys feed mill," he said.
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- Ridley says Murray Bridge mill will stay
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Former managing director, Tim Hart, who departed earlier this year, had noted the loss of the Ingham's contract, worth up to $2 million, in Ridley Agriproducts' annual report last September.
The mill in Clifton, Queensland was also expected to be affected by the Inghams decision.
"The commercial feeds team is working to secure other sources of new business and sales tonnes to replace this volume," he reported at the time.
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