New Zealand’s supply chains

New Zealand’s supply chains
Published: 03 October 2007

Holcim New Zealand is continuing to work on further prioritising the three
options it is currently investigating to meet projected growth in demand for
cement in New Zealand. In May Holcim announced it would focus on a
medium-term option to continue operating the existing Westport plant with
imports on a sustainable basis; and two long-term options involving building
a new dry-process plant at either Westport or Weston, near Oamaru. We are
currently working on narrowing the three options to the two which will be
put forward to our parent company, Holcim Ltd, for a final decision, says
Paul Commons, General Manager of Strategy and Development for Holcim New
Zealand. Key criteria that we are using to evaluate the three options are
geology, energy, logistics, economics, consents and support services.

At present we are evaluating the results of the Westport work programme, one
aspect of which has involved looking at the amount and characteristics of
limestone available in the area, and how much of this could be safely and
economically mined. We are also reviewing the supply security and cost
factors associated with both thermal and electrical energy, and looking at
results from coal trials we have carried out.

We have also been reviewing the information from our investigations into the
most efficient way to store and move cement, as well as looking at a
replacement for one of Holcims two cement ships, the MV Westport.
Information gathered for the Weston option cement plant resource consent
application will be used to evaluate the Weston new cement plant option
against the two Westport options.

A final decision is not expected from parent company, Holcim Ltd, before mid
to late 2008, and will depend on factors such as how the Holcim New Zealand
options compare with other investment opportunities, timing factors around
availability of capital, satisfaction with the information supplied by
Holcim New Zealand, and New Zealand government policy.