The future of McCain Foods’ Hastings plant is in doubt following a significant financial downturn and a substantial increase in borrowing, raising concerns about the long-term viability of the operation. The news comes amidst a wave of closures in the New Zealand food processing sector, including recent announcements from Heinz Watties, impacting hundreds of jobs nationwide. McCain is currently consulting with employees whose roles may be affected by the planned closure, the company confirmed.
Financial reports reveal a challenging period for McCain New Zealand, with the company reporting a loss of $16.9 million for the year ending June 30, 2025. This loss underscores the pressures facing the local arm of the global food giant, and follows losses reported in 2024 and 2022. The financial strain is compounded by a notable rise in related-party loans, signaling a reliance on parent company funding to sustain operations.
The latest financial results, filed under McCain Food (NZ)’s parent company Weyville Holdings, show a decrease in revenue from $325.7 million in 2024 to $306.7 million in 2025 – a year-on-year drop of $19.9 million. While the cost of sales saw a slight reduction, from $301.4 million to $296.7 million, administrative and financing costs both increased. Administrative expenses rose from $18.1 million to $20.9 million, and finance costs climbed from $4.2 million to $5.8 million. A $6.2 million income tax benefit partially offset these increases.
A History of Fluctuating Performance
This recent loss is not an isolated incident. McCain New Zealand has experienced a mixed financial performance over the past five years. Prior to the 2025 loss, the company reported a $2.14 million loss in 2024 and a $4.48 million loss in 2022. However, it did achieve profitability in 2023 with a $3.59 million profit and in 2021 with a $3.9 million profit, demonstrating a capacity for positive results under different circumstances. The current trajectory, however, is clearly concerning.
Significant Increase in Borrowing
Perhaps the most striking aspect of McCain New Zealand’s financial situation is the dramatic increase in its borrowing. The company has historically relied on loans from its parent company and related parties, repaying or deferring these loans over time. However, between 2024 and 2025, current unsecured liabilities surged from $38.4 million to $96.8 million.
The bulk of this increased borrowing comes from McCain Finance (NZ), with a loan now totaling $76.8 million, up from $38.4 million the previous year. This loan carries a 1% interest rate but, crucially, has no fixed repayment terms, raising questions about the long-term sustainability of this financing arrangement. An additional $20 million is owed to McCain’s European parent company, McCain Eurocentre.
Beyond these current liabilities, McCain New Zealand too holds unsecured non-current borrowings of $39.01 million. This includes $10,000 in preference shares, which have priority over ordinary shares in the event of liquidation, and $39 million in loans from McCain Eurocentre N.V. The total loan from McCain Eurocentre N.V. Amounts to $59 million, with interest rates ranging from 2.76% to 7.133%. The company paid $5.595 million in interest on these loans in 2025, an increase from $3.928 million in 2024.
Repayment schedules for the loans from McCain Eurocentre N.V. Show $20 million due on June 4, 2024, a further $20 million due on June 3, 2027, and another $19 million due on June 6, 2028. Notably, no dividends have been declared or paid in the last two financial years, following a $7 million dividend payment in 2023.
Broader Trends in New Zealand Food Processing
McCain’s struggles are occurring within a broader context of restructuring in the New Zealand food processing industry. Earlier this month, Heinz Watties announced plans to discontinue the sale and production of its frozen vegetables and other products, a move expected to impact 350 jobs nationally, including 50 positions at its Hastings plant on King Street. The Heinz Watties closures highlight the challenges facing manufacturers in the face of economic pressures and changing consumer demand.
The situation at McCain New Zealand is particularly sensitive given its role as a major employer in the Hawke’s Bay region. The potential closure of the Hastings plant would add to the job losses already announced by Heinz Watties, further impacting the local economy. The company has not yet provided a detailed timeline for the potential closure, or specifics on the number of jobs at risk.
What’s Next?
McCain New Zealand has been approached for comment on its financial results and the future of the Hastings plant, but has not yet responded. The company is currently in consultation with affected employees, a process that will likely determine the final outcome. The repayment schedule for the loans from McCain Eurocentre N.V. – with $20 million due in June 2024 – represents a key near-term financial checkpoint. The company’s ability to meet these obligations will be a critical indicator of its financial health.
The situation underscores the vulnerability of New Zealand’s manufacturing sector to global economic forces and the importance of sustainable financing models. Further updates on the future of the Hastings plant are expected in the coming weeks as the consultation process progresses.
This article provides general information and should not be considered financial advice.
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