The new cement plant at Weston is again on hold.
Holcim New Zealand has confirmed yesterday that its proposal to build a new cement plant is on hold for the foreseeable future.
Although the Weston plant is on hold, the company will be spending more than $100M constructing a new port terminal and upgrading its distribution infrastructure, so that it can start importing and distributing bulk cement throughout New Zealand.
Imported cement will replace local production from the 55-year-old Westport cement plant which will close in two to three year’s time.
Holcim New Zealand managing director Jeremy Smith said the company’s initial option to replace the Westport plan was to construct a new coment plant at Weston, near Oamaru.
“However, this would have brought with it the need to fund a considerable capital expenditure in an uncertain economic environment,” he said.
According to Mr Smith, Holcim New Zealand has now carried out an in-depth review of its options for coment supply and has identified importing cement as the most appropriate option for the foreseeable future.
“We recognise this decision will be disappointing for those people of Weston and Oamaru who supported this project,” he said.
“We have had considerable interest and support from the local community since we first announced that we were investigating the possibility of a new cement plant in the area.”
Waitaki MP Jacqui Dean said she was not disheartened by the decision but Holcim’s Swiss parent company had obviously made a very considered decision after weighing up global conditions.
“We wish them well in their endeavours to develop new port facilities, which is a considerable investment into New Zealand and shows their commitment to their New Zealand operation,” she said.
“Although regretfully, the new port operations will not be in Oamaru, we have a lot going for us into the foreseeable future with intensive farming, irrigation, new businesses and the North End Business Park.
“We have so much going for us and can look ahead with confidence.”
Waitaki Mayor Alex Familton said the latest decision was “disappointing”.
“However, in the long-term, we remain optimistic,” he said.
“Given the consents and resources, we are hopeful this decision will be temporary.”
North Otago Federated Farmers president Richard Strowger said the decision by Holcim New Zealand to put the project on hold was “not surprising”.
“I feel sure it will happen, but the international demand for cement and building, needs to improve before it gets the go-ahead,” he said.
Mr Smith confirmed that Holcim company will retain ownership of its Weston land assets so that the Weston plant proposal remains a viable option for the future.
The cement giant has not yet finalised a location for their import terminal.
According to Mr Smith, a number of practical and commercial factors will determine the best location.
“One of the first considerations is that the port must have a sufficient draft for the size of the ships that will deliver the cement,” he said.
“Other factors include a fit with our New Zealand distribution system, availability of a site close to the berth and good access for ongoing distribution.
“The company is currently investigating a number of locations in both islands where deep-water facilities are available for the size of the ships that will be used.”
The design of the terminal is also being reviewed, according to Mr Smith.
“We have looked at a range of terminal designs that are being used successfully by cement companies throughout the world,” he said.
“The final design will be influenced by a number of factors, including which port the terminal is sited at, the size of storage required and the need to both receive cement from chartered bulk ships and also dispatch cement for onward distribution throughout New Zealand.
“Initial estimatesare that the terminal will have a capacity for a throughput of one million tonnes of cement per year.”
Mr Smith said Holcim New Zealand hopes to make a decision on the localtion of the terminal over the next few months.
“Consent processes will be worked through at the selected port site and terminal designs finalised and it is envisaged that the import terminal will be operational in two-to-three years,” he said.