TAMWORTH’S Grain Products Australia plant has been saved, but 35 workers have been made redundant from today.
The factory, which has been in administration since late last year, has been sold to Allied Mills for an undisclosed sum.
The sale was announced yesterday by the receivers, McGrathNichol.
Although there’s been no official comment from those involved in the sale, Grain Products Australia employees told The Leader yesterday all but 20 of the factory’s staff had been laid off after meetings were held with staff.
One said “about 12 operations staff and eight office staff” were all that was left.
Another 11 were told they will have employment, but only until March 22, when Allied Mills takes over. A second employee said during the meetings staff had to check a list on a sheet of A3 paper posted on a wall with the names of employees being offered the redundancies.
“They will go out with all of their entitlements,” the employee said.
“And they were told they had 24 hours to hand back their keys and empty their lockers.”
The redundancies will mean the factory’s operations will be reduced to only producing dextrin and caramel.
“Shifts will now have three people on, not the eight we are used to, but the plant will be operating at less than a third of its normal capacity,” the employee said.
The staffing cuts, less than three months after GPA entered into voluntary administration, equate to an 80 per cent reduction in the grain-processing factory’s workforce.
When the receivership announcement was made there were 68 employees on GPA’s books.
The employees The Leader spoke to said while there was some annoyance at yesterday’s announcement, many of those laid off understood they had been lucky to stay for as long as they had.
“The factory has been slow for the last eight weeks, and during that time we all thought there had been too many guys on,” he said.
“We know that was their way of keeping as many employees as they could, for as long as they could.”
About 9.30am McGrathNichol announced the company had been sold, following a “competitive bidding process”.
The announcement came two days after a decision was made by GPA managers and administrators HBL Mann Judd to enter into liquidation. McGrathNichol receiver and manager Murray Smith said the sale was a “very pleasing result”.
“The sale agreement has been reached in a relatively short period of time and paves the way for GPA – a business which is vital to the town of Tamworth,” he said.
In the same statement, Mr Smith said the company would “continue operating and preserve as many jobs as possible”.
He said GPA employees’, customers’ and suppliers’ patience “while we conducted an urgent appraisal of the business, stabilised it and prepared it for sale is greatly appreciated”.
The Leader contacted Allied Mills for comment, but a spokeswoman for the company said no statement would be made until the sale was finalised later this month.
Allied Mills is a joint venture between Cargill and Graincorp.
The company owns and operates a flour mill in West Tamworth.
Tamworth mayor Col Murray said while the sale announcement was “absolutely good news”, the redundancies being offered was “tragic”. “As sad as it is, I think this is probably the best outcome we could have had, given the timeframe,” he said.
Cr Murray said, in his discussions with Allied Mills, it had been indicated the company was keen to get the plant back up and running at capacity and would look to re-employ people in the near future, if it could.
“It’s not an easy thing,” he said.
“But the other thing this sale has done is to secure the future of the Allied Mills mill in West Tamworth and the jobs there, which is something that could also have been in jeopardy if a sale agreement hadn’t been reached.”
When Cr Murray was asked what the sale meant for a development application (DA) for a pipeline from the mill that’s up for consideration by the Joint Regional Planning Panel, he said the sale would not impact the DA process.
“The DA is attached to the business and the land. I understand the new owners are interested in continuing to pursue that,” he said.
Member for New England Tony Windsor said while he was glad the business would still exist, reports of job losses were disappointing.
“We were of the opinion that the sale would mean the jobs were safe,” he said.