Holcim mulls cement options

Holcim mulls cement options
Published: 14 December 2007

Holcim is set to run its ruler over the New Zealand economy in determining how cement production options here compare with its other international investment opportunities.

Holcim’s New Zealand subsidiary has just received interim resource consent to build a new $200 million cement plant at Weston, near Oamaru. A panel of commissioners will finalise the consent if Holcim satisfies a list of conditions covering operating hours, noise, air quality, and traffic management by next week.

Holcim New Zealand has spent several years assessing how to deal with the country’s growing demand for cement. Several possible sites for local production have been investigated as well as importing options, and a combination of both.

The company recently culled the number of options it is looking at from three to two, dropping a proposal to build a new cement plant at Westport.

It is close to asking its parent to decide whether it should go ahead with Weston – a proposal seen as a long-term option with an expected life of at least 50 years – or continue the current Westport plant with a maintenance and capital works programme, which would be less capital-intensive but more expensive operationally.

Holcim NZ is promoting the Westport option as a medium-term option with a 20- to 30-year life expectancy.   It is compiling a feasibility report for its parent, covering both the Oamaru and Westport options.

Once the commissioners’ decision on the Oamaru proposal is final, it can be appealed.

Holcim NZ capital projects manager Ken Cowie said the consent conditions would have to be “workable” if that was to be a viable option.

“Consent conditions will need to be workable for a cement plant at Weston to be a viable option for us,” Mr Cowie said. However, Holcim still plans to promote the Oamaru option as its first preference to its parent, which is likely to also consider other factors before making its decision.

These could include considering how New Zealand options compare with other international investment opportunities, timing factors and availability of capital, confidence in the economy, and New Zealand government policy, Mr Cowie said.