Nearly 200 jobsare under threat with the announcement of the likely sale of a wool spinning plant in Oamaru.
Summit Wool Spinners, New Zealand's largest independent wool spinner, has a conditional sale agreement with Canterbury Spinners, a subsidiary of Godfrey Hirst.
The unions representing workers at the plant say Summit is the second-largest employer in Oamaru and has been part of the North Otago town for 130 years.
The sale is targeted for the end of February and is expected to affect 192 workers.
The unfavourable exchange rate and less local demand for wool carpets are cited as factors behind the move.
Godfrey Hirst New Zealand general manager Tania Pauling says if the sale goes through, a skeleton staff will be kept on to help assess the viability of the business.
Ms Pauling says it is in a very precarious situation and the company hopes to know by May whether the plant can be kept open.