1994: The Fortex collapse
The meat processing company Fortex was held up as an example of how such businesses should be run, but it suddenly collapsed in 1994, owing more than $130 million and with two key figures later jailed for fraud.
The Press reported on the shock that arose when the company was placed into receivership.
‘‘Fortex’s 1800 workers, half at Ashburton’s Seafield works, and others at Silverstream in Mosgiel, and a plant in Tauranga, say they were shocked to learn the company’s woes were such that receivership was required,’’ the paper wrote on March 24, 1994.
One of the receivers, Alan Isaac, said that between $100m and $150m was owed to creditors. Some farmers who had supplied stock also became unsecured creditors.
Lenders, including the BNZ and ANZ Banking Group, were said to have been under pressure from politicians to support the company.
While Meat Industry Council chief executive Brian Lynch said Fortex’s problems reflected rationalisation in the industry that was yet to be completed, Council of Trade Unions president Ken Douglas disagreed.
‘‘Workers in the industry had been under enormous personal pressure for more than a decade. In spite of extended wage freezes and concessions on working conditions, 12,000 jobs had gone in the industry since the 1980s.’’
Staff in Ashburton were stunned, and ‘‘minutes after the announcement, the Hampstead Rugby Club rooms were turned into an emergency centre offering support, counselling and information to many of the Seafield plant’s 900 workers’’.
‘‘It is a real kick in the guts, and just leaves you feeling empty,’’ said employee Warren Horton.
A processor, Gary Fraser, said that workers were continually given false hope. ‘‘I have no respect for head office at all. Even management at the plant was not well informed.
‘‘This has hit like a tonne of bricks.’’
160 Years is a series marking the launch of The Press newspaper in Christchurch on May 25, 1861.