Holcim progresses cement import plan, signals exit of lime business

Holcim New Zealand is moving ahead with plans to exit manufacturing in New Zealand and chief executive Jeremy Smith is losing his job as the business will be run from Australia in future.

The company's Westport cement plant will close by the second half of 2016 when new import facilities at Waitemata in Auckland and Timaru are fully operational.

Plans for a new cement manufacturing plant at Weston in North Otago remain on hold but the company is keeping the assets so it has the option of "eventually building a new cement plant". Cement for the rebuilding of Christchurch will be imported through Timaru's port.

The company is also trying to sell its lime business in New Zealand, which it no longer regards as core business.

McDonalds Lime Ltd is majority owned by Holcim NZ and part-owned by New Zealand Steel and it has the country's largest lime quarry at Oparure, north of Te Kuiti. The company also wholly owns Taylor's Lime at Dunback in North Otago.

The company announced in August 2013 that imported cement would replace local production at Westport.

"The company now has all the final approvals to go ahead with its investment of more than $100 million to build two 30,000 tonne import terminals, one in Timaru and one in Auckland," Smith said.

Construction will start at PrimePort Timaru during August and work will start in Auckland in December. Each site will employ 50 people during the construction phase and each terminal will have just six employees when operating.

"This confirmation of start dates can be taken as a sign of the global company's confidence in the strength of the New Zealand market and in particular opportunities with the rebuild of Christchurch post-earthquake," Smith said.

The changes in the business model reduce the scale of the New Zealand business so it will need fewer managers.

"The decision has been taken that it would be logical to now combine the New Zealand and Australian operations," Smith said.

The position of managing director held by Smith is being dis-established at the end of 2014 and he will remain with the company into 2015 to assist with the handover. A country manager will be appointed for New Zealand.

Smith said whilst his role was being dis-established he believed this was the right strategy for the industry and the New Zealand operation.

(BusinessDesk)