Holcim New Zealand Considers Findings

25 October 2007

Holcim New Zealand is consulting with its staff as it considers findings relating to investigations into the three priority options being considered for meeting the projected growth in domestic cement demand.

Holcim is considering one medium-term (continuation of the Westport works with bulk imports) and two long-term options (a new plant at either Westport or Weston, Oamaru) for meeting cement demand in New Zealand.

"We intend by the end of the year to narrow from three to two priority options, using a number of evaluation criteria," says Paul Commons, Holcim New Zealand General Manager of Strategy and Development.

Holcim New Zealand will recommend two options to its parent company, Holcim Limited, which will make the final decision about which, if any, of the options is pursued. This decision is not expected before late 2008.

For the past five years Holcim has been importing cement to supplement production from its Westport cement plant, which is operating at full capacity. The current method of bulk bag importing of cement is not considered a sustainable long-term option.

"This is a complex task and there are many factors to consider, including staff feedback on the three options being investigated.

"The three options have some differences in terms of the capital and operating costs. It is our intention to supply to Holcim Limited for consideration two distinct alternatives in terms of capital requirements and operation costs."

The key criteria used during investigations of the options have been: geology, energy, logistics, economics, consents, and services (for more detail please see the separate documents: Findings from Investigations - Cement Supply Options Project; and Findings from Investigations - Questions and Answers).

Parent company Holcim Limited is also likely to consider, when looking at the two priority options, other factors such as Government policy, economic confidence, how the New Zealand options compare with other international investment options, as well as timing factors and the availability of capital.

"While no decision has yet been made, the findings so far indicate the existing Westport plant plus bulk imports offers a low capital cost option.

"When comparing the two new plant options an Oamaru new plant option would appear to offer some advantages over a Westport new plant option," says Paul Commons.

For more information contact:
Gerald Raymond
Phone 03 377-9877 or 027 443-7253