Staff at the Marius St ingredients and processing plant were told the news in a closed-door meeting on Thursday morning.

The company said the production of starch and gluten – which is processed at the Marius St plant – was no longer profitable and not “core-business”.

The majority of the 17 full-time jobs will be cut from the CBD factory by September 8 as the company decommissions some of the plant machinery, while the Belmore St processing plant will see a reduction in external labour hire.

“This decision is based on starch and gluten not being core to the Allied Pinnacle group strategy and even with the greatest intention it is not a financially viable part of our business,” Allied Pinnancle CEO James Ajaka said.

“This decision was not taken lightly and is based on the company needing to focus investment behind its core business.”

The news was a big blow to current and former staff with the plant the birthplace of milling and grocery products business, Fielder Gillespie, which was later known as Goodman Fielder. 

The site has also just undergone a $21 million upgrade.

Mr Ajaka said all staff will receive their full entitlements and voluntary redundancies will be offered in the first instance. 

Tamworth Business Chamber president Jye Segboer told The Leader it was clear it “was a business decision”.

He said there were close to 1000 vacancies for jobs across the region, so he was confident affected staff could find work and stay in Tamworth.

“It's always said to see job losses across the region,” Mr Segboer said.

“The decision is obviously a business one being based on profitability purposes for Allied Pinnacle.”

SEVENTEEN full-time jobs will be slashed from flour giant, Allied Pinnacle’s Tamworth plant as it cuts production of two key bakery supplies.

The company told staff in a meeting on Thursday meeting it would stop production of gluten and starch at its Marius St factory in Tamworth because it was no longer “core-business”.

External labour hire will also be reduced but the company said it will look to offer voluntary redundancies first in a bid to cut the 17 jobs at the CBD site which is the company’s food ingredients plant.

“This decision was not take lightly and is based on the company needing to focus investment behind its core business,” Allied Pinnancle CEO James Ajaka said in a statement to The Leader.

“This decision is based on starch and gluten not being core to the Allied Pinnacle group strategy and even with the greatest intention it is not a financially viable part of our business.

“Rather we will continue to invest in our milling and bakery sites nationally, to ensure we remain market leaders.”

The company could not say when the production of starch and gluten would cease, but its expected it will stop in the next few weeks.

Allied Pinnacle said all staff will receive their full entitlements but it’s not known exactly when the jobs will go.

Mr Ajacka said it will be business as usual at its Belmore St factory and the company was working with the union.

Allied Mills’ Marius St site in Tamworth has just undergone an upgrade worth $21 million.

In January, Graincorp announced it had sold its 60 per cent share in flour supplier Allied Mills to Pacific Equity Partners (PEP) for $190 million.

The Tamworth flour mill was the birthplace of milling and grocery products business Fielder Gillespie which was later known as Goodman Fielder.