The AFFCO meat company has confirmed the closure of its casings plant at Wiri in Auckland, with the loss of 20 permanent jobs and a similar number of seasonal positions.
The plant has been used to clean, trim and grade sheep and lambs' intestines for export, mainly to Europe where they are used as natural sausage skins.
AFFCO says increased operating costs and changes in the international pricing structure for casings mean it's no longer economic to run a centralised processing facility.
Instead it will collect and freeze the intestines at meat plants and ship them to China for processing.
The company has confirmed the closure after two weeks consultation with employees and the Meatworkers Union.
Chief executive Stuart Weston says it has support processes in place to help the redundant workers find new jobs inside and outside the company.