Displaying items by tag: New Zealand

Weston is off. The 'will-they, won't they' of the New Zealand cement industry took a more decisive turn this week with the announcement that Holcim New Zealand intends to import cement instead.

Once Holcim's existing cement plant at Westport winds down there will be no more indigenous cement production on New Zealand's South Island. Golden Bay Cement on North Island will be left as the nation's sole cement producer. Instead Holcim now plans to build US$80m on an import terminal and related infrastructure.

Given a previous price tag of US$400m for the Weston project, switching to an import strategy makes sense for Holcim which has had a hard time of late with a poor first quarter following a tough year in 2012. Despite the benefits that the construction sector in New Zealand has seen with the rebuilding following the 2011 Christchurch earthquake, Holcim is thinking of its wider strategy. Although, as one of the largest multinational cement producers, Holcim has a wide supply chain for clinker, Australia reported poor sales in 2012 and it would be an obvious hub to keep New Zealand topped up with sufficient product.

Last week's doubts about the Indian cement market – when Holcim announced major business restructuring in India – may also have an effect as Vicat too has reported problems in the country this week. The question to ask when Holcim releases its half-year results in mid-August 2013 is how much excess capacity does the company have?

Coincidentally, importing cement is one issue that has come up in the UK Competition Commission's on-going investigation into the UK cement industry. An Irish cement importer has alleged that unnamed European cement producers have blocked his attempts to import cement to Ireland. The UK Competition Commission will continue its investigation until late 2013. Whilst we are not suggesting that the New Zealand cement industry has any problems of this kind, as the market adjusts to a higher level of imports it will encounter new challenges.

New Zealand: Holcim New Zealand Ltd has announced that it will spend more than US$80m on the construction of an import terminal and related infrastructure that will allow it to import and distribute bulk cement to the New Zealand market, according to local news agency Scoop Independent News. The terminal is expected to be operational in two to three years time. The location of Holcim New Zealand's new import terminal is yet to be finalised and the company is investigating options at a number of New Zealand ports.

Announcing the decision, Holcim New Zealand Ltd managing director Jeremy Smith said, "This represents a substantial commitment by Holcim to the New Zealand building materials market. It means we will be able to leverage off the vast resources available through the Holcim Ltd worldwide supply network to ensure that our New Zealand customers receive cement of a quality and specification suitable for New Zealand conditions."

Once operational, cement imported through the new terminal will replace local production at the company's Westport cement plant. Holcim New Zealand has signalled for some years that the Westport plant was not sustainable in the long term. The decision also means that the long-delayed proposal for a new cement plant at Weston, near Oamaru, is on hold for the foreseeable future. Holcim will, however, maintain ownership of its land assets for the foreseeable future.

"We recognise that this decision has an impact for our staff, customers and for the Westport and Weston communities," said Smith. "It's one we've arrived at after extensively investigating a range of cement supply options and we will be working through the implications with those who will be impacted by the move. For the current economic environment, constructing an import terminal and importing cement is simply the most appropriate decision."

New Zealand: Holcim has delayed the decision to build a new cement plant in Weston until 2013. It is now the fifth time since 2009 that the multinational producer has failed to confirm its plans for the US$400m project.

"In this very challenging environment the Weston project continues to have the support of Holcim and the team are refining project information and working on various elements to ensure that the project proposal remains in a state of readiness for future consideration," said Holcim New Zealand capital projects manager Ken Cowie. He blamed the 'uncertain' international financial situation for the delay but denied that the project had been scrapped. The replacement for the Westport plant will have a capacity of 0.86Mt/yr.

New Zealand: Holcim New Zealand has reported an after-tax surplus of US$6.77m in 2011 according to its annual report. Total revenue for the year fell by 1.55% to US$214 from US$217m in 2010. Sales of cement fell slightly in 2011 and have been in decline since mid-2008. The national use of cement is a quarter lower than the last peak in 2007.

Notably a proposed new cement plant at Weston, near Oamaru, was on hold because of global economic uncertainty and would not be considered again before late in 2012, the annual report said. However, Holcim's partnerships with large construction companies brought several new projects in 2011, including the Fisher & Paykel Healthcare plant in Auckland and the Auckland District Health Board's six-level car park. Customers south of Christchurch were serviced from Dunedin and bagged cement for Christchurch came from Nelson and Dunedin while bulk cement for Holcim's Sockburn silos was railed from Westport and trucked from Dunedin.

New Zealand: New Zealand's foreign investment watchdog, the Overseas Investment Office (OIO), has given the green light to Holcim for the purchase of a leasehold at Timaru's port. The amount Holcim paid to lease the 2.26 hectares of land, which it will hold for a minimum of 50 years, was kept confidential by the OIO.

The agreed leasehold, including a new wharf and storage facilities capable of handling cement, indicates that Holcim is preparing the ground for the construction of a new US$500m cement plant at Weston, near Oamaru. In October 2011 the Swiss cement company announced a delay on a decision for the proposed plant until late in 2012. That announcement was the latest in a long line of delays that started in 2007. Construction of the 0.86Mt/yr plant is expected to create nearly 500 local jobs.

New Zealand: Holcim has put plans to a build a new factory in Weston on hold until at least 2012.

The USD400m plant near Oamaru was to become the company's sole production facility in the region. Its creation was intended to create about 450 construction jobs and 120 permanent positions in the area. The decision to proceed with the factory had been expected in August 2011.

Holcim New Zealand's capital projects manager, Ken Cowie, stated that the company's Swiss headquarters had put the project on hold due to uncertainty created by the global economic downturn. "We realise that this creates ongoing uncertainty but we will continue to keep people informed," Cowie commented.

As reported by Global Cement on 5 July 2011 Holcim was seeking contractors to register interest in building the plant in July 2011. Plans to build the factory will now not be considered until late 2012.

New Zealand: Contractors are being asked to register their interest in building a USD400m cement plant near Weston and a shipping terminal at Timaru's port on behalf of Holcim New Zealand. Holcim is still seeking final approval for the projects. Expressions of interest close on 29 July 2011. On 28 June 2011 Holcim New Zealand posted a message on its website inviting contractors to register their interest. Capital projects manager Ken Cowie stated that the marketplace needs to be aware of what will be required if the company's parent board in Switzerland approves the project.

"Getting some preliminary information from the marketplace now would help us get the project under way in a timely manner if the Holcim Ltd board approves it later this year," said Cowie. "It's also about getting an indication of which contractors are in the marketplace with suitable qualifications and experience to undertake the various aspects of work that will be required."

The tentative timetable to construct the plant on a 40ha site indicates that, subject to board approval, site preparation could start in late 2011, equipment could be ordered in late 2011 and early 2012 and the pouring of foundations could take place in the third quarter of 2012. At the peak of construction, almost 500 people would be employed. Commissioning of the plant would be in early 2014 with production starting by the middle of that year. Actual dates for work on the project would depend on if and when approval is received.

The decision to call for expressions of interest from contractors followed the executive committee of parent company Holcim Ltd in may recommending the proposal go forward to its board for a decision. The general scope of works outlined in the expressions of interest document includes the Weston cement plant, associated quarries and pits and a new clinker and cement shipping terminal at Timaru.

The main raw material quarries and pits, limestone, tuff and siltstone were immediately next to the plant site and silica sand would be trucked from a pit near Windsor. Coal to fuel a kiln would be trucked from an open cast pit at Ngapara. KiwiRail would reconstruct the branch line from the South Island main trunk line at Waiareka to the plant to haul cement to Timaru.

"Aspects of the work, such as cement plant mechanical and electrical equipment, would require the involvement of specialist international suppliers and we've been in discussion with a number of these companies about our potential requirements since late 2010," said Cowie.

Holcim New Zealand said it was looking for contractors who had an excellent record of working collaboratively with both the client and other contractors to successfully complete 'a world-class project.' Completing the project with the least possible impact on the environment was also a project goal.

Holcim New Zealand would have overall management of the project and contract out a number of packages of work related to quarry operations, construction of the plant and the Timaru shipping terminal. Following a review of applications, selected contractors will be provided with detailed specifications and drawings and invited to submit bids for the various packages of work.

Once the Weston plant is completed Holcim will close its 50 year old cement factory near Westport in the West Coast region. The Buller District Mayor, Pat McManus, stated that the district's coal industry should fill the gap in the economy. Cowie stated that the West Coast facility will remain open for about three years while the new plant is built.