The Tauranga Chamber of Commerce says job losses at the North Island Mussel Processors Limited will be a blow to the community.
The company owned by Sanford, Sealord and Greenshell Investments has been put in receivership
Up to 20 full time jobs and 200 seasonal work positions are on the line.
Chamber chief executive Max Mason says the company's processing plant is in Tauranga.
"It's very sad to hear of North Island Mussel Processors, and we hope that there's some sort of phoenix resurrection of the business. That would be really great news if that could come about."
He says the job loss will be a blow for the community.
"We really hope that another business can come along and pick up the assets and potentially the business itself, and retain those jobs. That would be the best option."
Business correspondent Roger Kerr says the 23-million dollar factory only opened in June 2010.
"Let's hope this is just a bit of a minor hiccup for the industry."
The receivership follows Greenshell Investments failure to pay processing fees of $1.2 million and other debts dating back six months.
The company's mussel farm is in the Coromandel.
Photo: NZ Herald