Lyttelton passed over for Timaru
Lyttelton Port has missed out on about $50 million of investment in cement importing plant by Holcim, which has instead chosen Timaru.
Port Chalmers near Dunedin has also been passed over, like Lyttelton, by Holcim investing about $50m in a cement terminal in the South Island and a similar amount in the North Island.
Holcim yesterday announced Primeport Timaru and Waitemata Auckland would be its respective South and North island locations for a pair of terminals to import bulk cement to supply the New Zealand market.
Coastal ships will feed cement out from Timaru and Waitemata to secondary sites like Lyttelton.
The $100m of port storage projects will take two to three years to complete.
That funding will be split roughly 50/50 between the two ports, allowing storage of 30,000 tonnes of cement at each site to be fed out to demand points.
The $50m invested in Timaru will include a ship unloader and conveyor system leading to an enclosed storage facility on leased land. There will also be pumping equipment allowing cement to be fed back from storage on to coastal ships.
Holcim has already spent $5m on a double silo capacity project at Lyttelton, meaning 11,000 tonnes of cement can now be stored at the Christchurch port. Before the upgrade storage was limited to 7000 tonnes.
Holcim (New Zealand) capital projects manager Ken Cowie said that 11,000 tonnes would last Christchurch a couple of weeks.
Lyttelton port had missed out on becoming the main South Island terminal despite the growing demand for building products in Christchurch, Cowie confirmed.
"Choosing the Port of Timaru provides effective access to the major market of Christchurch, utilising the new silo capacity there, and to the rest of the South Island," he said.
The cement deal can be seen as a win back by PrimePort over Lyttelton Port of Christchurch. In 2009 Lyttelton port signed a multimillion-dollar deal with Fonterra, leaving PrimePort in shock over the loss of much of the dairy giant's business.
"There's no one particular reason why we've gone to Timaru. We had a whole bundle of concepts and issues we wanted to be worked through . . . at the end of the day when we put it all together, Timaru came out as our preferred port in the South Island," Cowie said.
Timaru and Auckland will get about 20 cement supply ships a year from Asia.
Building an import terminal at Timaru was also consistent with leaving open the option of building a new $500m cement plant at Weston, near Oamaru, although this remained on hold for the foreseeable future, Cowie said.
Holcim and Timaru port had developed a good relationship during the planning stages for the potential Weston project.
The company announced in August that imported cement would replace local production at the company's Westport cement plant, which will close in two to three years once the two import terminals are fully operational. About 110-120 jobs will be lost.
PrimePort chief executive Jeremy Boys said Timaru was happy to win the business.
The port would upgrade wharf No 2 and carry out dredging for the import ships such as the Milburn Carrier II.
The port would work with Holcim to seek proposals from contractors.
"We've given them (Holcim) a concept, and clearly that's one of the advantages of Timaru I think, with ideal working sites to make these things happen," Boys said.
Subject to confirming final details with the preferred ports, construction was intended to start next year.
Lyttelton port was not available for comment.