Holcim Looks to Strengthen Business Case

Holcim Looks to Strengthen Business Case

6 July 2010 - Holcim (New Zealand) Ltd is exploring export opportunities as a way to strengthen the business case for its proposed cement plant at Weston, near Oamaru.

“The recession resulted in Holcim cement sales dropping by 20% last year. While experience tell us that demand will eventually increase again, a drop of that magnitude inevitably creates challenges for an investment of this scale”, said Holcim Capital Projects Manager, Ken Cowie.

“We feel there are a number of potential export markets for clinker** throughout the Pacific area that could help us achieve economies of scale and thus help strengthen our case.”

“In order for Holcim New Zealand to be able to access an export market in the Pacific region customers would first need to be assured of a supply of meaningful volumes of clinker for a period of at least five years”, Ken Cowie said. “We’ve been investigating the capability of the supply chain to meet this requirement, and have identified the need for some modifications to the plant layout and design to enhance its clinker manufacturing capacity.”

As outlined in a newsletter being circulated to approximately 8000 Oamaru residents and other interested parties this week, with the proposed modifications the plant still remains within consented boundaries and height restrictions. Clinker would be transported to Timaru Port on the proposed cement train. No additional train movements would be required.

“Being able to demonstrate sufficient demand from the outset would certainly give us a stronger business case,” Ken Cowie said. That’s important when you consider that building a new plant at Weston needs to stand up against the option of building additional clinker capacity in Australia or Asia and exporting to New Zealand.”

** Clinker is an intermediate material in the cement production process.

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