Workforce confidence at smelter slowly lifts
@devlincolle While the Tiwai Pt plant is not out of the woods yet, it's hopefully on the right track, writes Collette Devlin.
It's a tough task but Tiwai's new boss is determined to ensure the southern smelter gets back on track.
New Zealand Aluminium Smelters general manager Gretta Stephens says she is making some headway on returning the Tiwai Pt aluminium smelter to viability, but admits it is proving to be a tough task.
Her aim is to ensure the smelter is on a solid footing and back in the black.
An improvement plan to deliver an extra $20 million of value to the smelter was now in place and would come from additional revenue and cost savings, she said.
Changes to the revenue would come after the smelter changed the mix of products it sold - it would now be concentrating on making the most valuable products.
Cost savings would be made in several areas, one of which was external freight costs.
It had been a difficult year for the experienced and long-term workforce, which, despite the uncertainty, continued to operate the site smoothly, she said.
NZAS had started spending capital for the site, which was positive and making people hopeful, she said.
Some examples of this included buying a new saw for rolling block products and replacing a transformer in the switch yard.
The biggest milestone for NZAS was the successful renegotiation of its power contract with Meridian Energy in August, which followed 13 months of of talks and meant the smelter now had the ability to return to profitability, she said.
In September, NZAS restored production on lines 1 to 3 after its contracted power load with Meridian Energy returned to 572 megawatts. It was now using this full amount.
The decision was made not to restart line 4 this summer because of unfavourable economics such as low metal prices, high exchange rate and the impact on next year's transmission costs. However, this did not mean line 4 would not be started some time in the future, she said.
"I want NZAS to be in a good position for the next four years, so when the electricity contract changes we will be in a position to keep going as a profitable and efficient business."
Although Stephens, a veteran of more than 20 years in the aluminium industry, said she had seen the mood lift on site since she started in August, she warned the smelter was not completely out of the woods.
"The economics of our business are still tight and challenging . . . with the metal price remaining low this will still take some work but I am confident it is a challenge we can meet," she said.
"Business security has definitely improved but we have a long way to go to be a fully secure and a profitable business."
Before coming to Southland, Stephens, originally from Melbourne, worked for Pacific Aluminium for three years in Brisbane. She was general manager for business improvement and technology for the company's four aluminium smelters in Australia and New Zealand during that time.
Married with two children, she is the first female general manager for NZAS and previously worked at Tiwai for six years from 1993 to 1998.
The Southland Times