Holcim New Zealand Prioritising Cement Supply Options

3 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."

Paul Commons says Holcim cement transport costs are also an important factor.

"The nature of New Zealand's population and geography means cement distribution costs are often equivalent to manufacturing costs.

"We have 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 Holcim's 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.

Holcim New Zealand expects that a decision on the two priority options will be made before the end of the year.

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.

"In the meantime we are holding meetings with Westport staff to ensure they are well informed about the options and the criteria being used to evaluate them. We have also met with key Westport people and organisations to answer their questions and update them on Holcim's investigations on factors that could support a decision favouring future cement operations at Westport," says Paul Commons.

Weston Option resource consent hearing

The resource consent hearing for the Weston Option cement plant proposal is due to reconvene on 8 October after two extra weeks was given to allow Holcim and submitters a chance to make their presentations.

Once the hearing is completed, the three commissioners will review all evidence from Holcim, other submitters, and Council Officers' reports, and a decision is expected to take 6 - 8 weeks.

For more information contact:
Gerald Raymond
Phone 027 443-7253