The Kaikoura branch of Fonterra looks set to close its doors.

Fonterra looks set to close its Kaikoura plant putting 30 jobs at risk.

Staff were told of the proposal to close the cheese factory and the site on Tuesday morning.

Fonterra is one of the largest employers in the seaside town, with 22 full-time staff and eight temporary staff.

Packaging operator David Reid checks the seal on a wrapped block of cheese at Fonterra's Kaikoura cheese factory in a photo taken in 2004.

The company has met with staff at its Kaikoura site as consultation with them starts on a proposal to permanently close the site.

READ MORE: Fonterra confirms 230 more job cuts

Kaikoura mayor Winston Gray said the news was not good, but fortunately the Kaikoura economy was relatively buoyant because of tourism.

The town of 3600 had taken a hit after the Christchurch earthquakes, but had bounced back in recent years.

Mark Leslie, director New Zealand manufacturing, said Fonterra would be discussing the proposal over the coming weeks, with a decision expected mid-March.

"This is a difficult process for our people and supporting them is our priority as we work through the details," Leslie said.

"We will be discussing all options and opportunities available to our staff around their future employment, as well as providing the support they need to make decisions should the closure go ahead."

The Kaikoura site typically operates between three to five months a year producing a small volume of specialty cheese.

Leslie said moving the production to other sites would bring significant cost savings for the business and its 10,500 farmer shareholders.

A Fonterra spokesman said the milk which is processed in Kaikoura would go to its Darfield plant, if the proposal to close went ahead.

Outside of peak season, milk for Kaikoura was collected as far north as Marlborough and south to Culverden.

Gray said the Kaikoura region was not a big dairying one, with about 22 farms.

NZ Dairy Workers Union national secretary Chris Flatt said he understood there were 22 union members who worked fulltime affected by the proposal.

There were other temporary staff affected who could also be union members but this was to be confirmed.

"We have to go away and analyse the proposal to see if there are ways the site can remain open but if that's not a possibility then under the collective agreement we have redeployment options into similar work around the region," Flatt said.

"Our thoughts are with the affected workers and the community. The site has been there a long time," Flatt said.

A staff member said after the meetings while it was a proposal at this stage, the feeling on the ground was that the closure was definite.

The atmosphere was sombre with some staff angry at the plans, he said.

The last production date was proposed for mid to late April with the site closing its doors on May 4, he said.

While it seemed like a short timeframe for some, it was too long for others, who saw little incentive to continue working with the closure looming over them, the worker said.

Fonterra told staff it would try to accommodate them as best they could, which could include relocating to Clandeboye or Darfield, he said.

"There was a rough show of hands and about a third of the staff said they would be interested in relocating."

Staff would also be looking for alternative employment but this would be difficult to find in Kaikoura, especially at this time of year, and for similar pay, he said.

Last month Fonterra officially opened its $72 million mozzarella plant in Clandeboye, South Canterbury.

The Clandeboye factory was blessed by Arowhenua marae upoko Tewera King, who said the Clandeboye factory was vital to the area.

"Fonterra saved this town," King said.