Two Cement Supply Options Chosen

6 December 2007

Holcim New Zealand has chosen its two priority options to address growing New Zealand demand for cement, after several years of investigations covering a number of possible sites for local production, investigation of importing, and a combination of both.

The decision on which two options will go forward to parent company, Holcim Limited, who make the final decision, comes after the company carried out comprehensive investigations into three cement supply options. Feedback sought from staff during October/November has confirmed the findings from these investigations.

One of the two options, a new cement plant at Weston near Oamaru, is seen as a long term option with an expected life of at least 50 years. The second option, offering lower capital cost but higher operational costs, is to continue the current Westport plant with an appropriate maintenance and capital works programme, in combination with imports on a bulk basis. This is seen as a medium term option of 20 - 30 years.

"While we have identified our two priority options for future cement supply, we are not yet at the stage of putting these forward to our parent company for a final decision," said Capital Projects Manager, Ken Cowie.

"Holcim Limited requires a comprehensive feasibility report for any significant capital investment decision. Our project team are currently working on completing this, using information gathered from investigations carried out on the Oamaru new plant option and the Westport options over the last few years.

Final results of consent applications for the Oamaru new plant option will also need clarification before the two options are put forward.

"We currently have an interim decision from the commissioners, saying they are minded to grant all the consents we sought subject to finalisation of a range of conditions specified by them," Ken Cowie said. "Holcim and other submitters have until 19 December to provide a response to the commissioners on the conditions they have specified, which include conditions relating to hours of operation, noise, air quality, and traffic management."

Once the commissioners' decision is final, all submitters will have the opportunity to appeal that decision.

"Consent conditions will need to be workable for a cement plant at Weston to be a viable option for us."

Holcim New Zealand will put forward the two options with the Oamaru new plant option identified as its first preference, and Holcim Limited is likely to take a range of other factors into account in 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.

A decision by parent company Holcim Limited on which, if any of the cement supply options will be pursued is not expected before late 2008.

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Holcim (New Zealand) Ltd is a leading New Zealand supplier of cement, aggregates, ready mixed concrete and lime. Its involvement in the New Zealand building industry dates back to 1888, and today it operates more than 35 sites and employs approximately 530 people. It is part of the Holcim Group, one of the world's leading suppliers of cement, aggregates and construction-related services represented in over 70 countries on all continents.
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For further information please contact:
Gerald Raymond PH 027 443 7253

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