Holcim buys from NZ competitor

Holcim buys from NZ competitor
Published: 01 June 2005

Holcim has been forced to buy cement off rival Fletcher Building (Golden Bay Cement) because of continuing problems with Westport harbour.   Low harbour bar depths, caused by a shortage of rainfall in the Buller River catchment, have made the harbour too shallow for Holcim’s ships to navigate safely for almost six weeks.  Cement was being moved by rail and road but stockpiles were growing at its Cape Foulwind plant, which might soon have to cut production, Holcim managing director Rex Williams said.   "If it continues for another few weeks there will be cement shortages," Mr Williams said. "It’s not going to bring the construction industry to a halt or anything. There may be shortages for a half a day or a day while we get supplies in, but nothing that’s going to be severe."  

There was some limited trading between the two cement producers but for the most part they were self-sufficient, Golden Bay Cement general manager Ross Harper said.  "It’s only when extraordinary circumstances occur that we would sell cement to each other like this.  It’s not a windfall. It’s an ability to sell some capacity to meet the needs of a competitor. The boot can be on the other foot -- we are mindful of that. I don’t think it is in anyone’s interests for the New Zealand construction industry to suffer."  

The sand bar is usually kept at bay by regular floods down the Buller River but a lack of rain has caused problems.  Mr Williams said dredging had helped but had not been enough to allow its cement carriers to berth.  

The cement is being driven to Nelson for shipping out, and more was being railed to Christchurch. The problems come as Holcim considers where to build a $100m new plant. The 50-year-old Cape Foulwind plant is up against potential new sites in Oamaru and south Waikato-King Country.   The problems were a reminder to the company that it operated out of a bar harbour, and this would be taken into account in making a decision, Mr Williams said.