As part of its strategic focus on smallgoods production, the company announced yesterday that in future it would buy its meat from Big River Pork, at Murray Bridge in South Australia.

Chief executive Ian Halliday said KR Castlemaine recognised the decision would have a significant impact on people in the abattoir and boning area in Castlemaine, but it would do everything it could to help employees.

"There will be no job losses for any permanent employees," he said.

"Alternate roles will be available within KR Castlemaine Foods."

Staff transferred to the smallgoods operation would have their basic rates of pay guaranteed, but there were still issues about overtime and bonuses to be worked though, Mr Halliday said.

One employee told The Advertiser yesterday that these represented an extra $100 a week to him.

The abattoir and boning facilities in Castlemaine were old and would require significant investment to continue, Mr Halliday said.

"The decision to transfer our abattoir and boning operations is a strategic one, based on our vision to become the number one smallgoods producer in Australia," Mr Halliday said.

He said that KR Castlemaine would continue to require pigs and it would honour all existing supply contracts with Victorian producers.

"We don't expect farmers to be financially disadvantaged by this move and we will be subsidising transport to ensure that freight costs are kept in line with current delivery costs to Castlemaine."

In September, 2006, the company announced the closure of smallgoods production, and the sale of its abattoir, at Toowoomba in Queensland.

Although jobs at Castlemaine were offered to retrenched Queensland workers, almost none have decided to make the move south.

The transfer of smallgoods production to Castlemaine will take place over the next two months and the closure of the Castlemaine abattoir should be complete by mid-February, Mr Halliday said.

The company is still seeking a buyer for its Toowoomba abattoir.