Woolston factory's future in balance

MICHAEL BERRY
Last updated 05:00 11/06/2013
Threads of gelatine can be seen in this photograph showing some of the plant from the factory in Woolston.
Fairfax NZ
GOOEY GOODNESS: Threads of gelatine can be seen in this photograph showing some of the plant from the factory in Woolston.

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The decision whether to rebuild and upgrade Woolston's quake-damaged Gelita gelatine plant is expected to be made within two months.

Last month, Gelita NZ director and Australasian general manager Pablo Silber put the case to parent company Gelita AG's Germany-based management board for an $18-million plan to fix the century-old Connal St factory.

He was asked for more information, including cases for other places the money could be spent and how that would stack up with the expected return from the factory upgrade.

Gelita NZ plant manager Gary Monk said the parent company's management board gave no inclination either way, and a decision was likely to be made next month or in August.

Meanwhile, Gelita NZ's financial filings with the Companies Office show it had $12.5m cash on its books at December 31. It had a further $4.5m owed to it in accounts receivable, mostly from other companies in the Gelita group. The factory made $1.6m last year from $22.3m revenue.

The Woolston plant makes about 1720 tonnes of food additive gelatine from 12,000 tonnes of offcut cattle skin supplied from meatworks. It employs 60 people and has resource consent to operate till June 2029.

This year Environment Canterbury (ECan) started fining the company for letting bad smells escape the boundary.

The factory has been under pressure from neighbours since the quakes damaged many of its buildings.

That was exacerbated by gentrification of the predominantly industrial area - exemplified by the Cassels & Sons bar and retail precinct - and an unusually hot summer.

Monk said the company was working with an air quality scientist recommended by ECan and the onset of winter had helped the business ease odour problems.

ECan resource management director Kim Drummond said Gelita had been fined three times, totalling roughly $3000, over the summer period. For those fines to be served, the breach of the odour requirements had to be severe, he said.

However, there had been no complaints in May.

"This is the time for them to really gear up so when the summer does come they are ready for it," Drummond said.

In 1996, ECan received seven complaints about the plant. By 2006 that had exploded to 178.

It was unclear whether the problem was worse or neighbours were more sensitive, he said, and the quakes had challenged the company.

"The community has shown a degree of tolerance after the quake, but now that tolerance is exhausted."

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An $18-million plan to fix up the factory and vastly improve its environmental performance had been tabled, although it could take three years to implement, Drummond said.

During that time, the company would have to meet its odour requirements or seek a temporary variation to its consent which would need to be accepted by the community.

Another environmental issue was the breaches in sulphur dioxide levels in the Woolston airshed - although at levels below harmful.

Drummond said there was a "high likelihood" the chemical was coming from Gelita, which produces sulphurous acid to neutralise caustic mixtures in the production of gelatine.

Gelita's Monk said it could be a number of plants, considering the number of industrial plants in the area.

He said breaches happened because of lingering past emissions in still weather, rather than plants releasing too much of the chemical.

COMPLAINTS ABOUT GELITA

Year Complaints

2007 (51), 3 verified by ECan

2008 (51), 8 verified by ECan

2009 (18), 2 verified by ECan

2010 (55), 14 verified by ECan

2011 (125), 41 verified by ECan

2012 (100), 24 verified by ECan

2013 (80), 27 verified by ECan (to early April)

Source: Environment Canterbury

WHAT THE BOOKS REVEAL

Gelita NZ had $12.5 million cash on its books at December 31, its financial filings with the Companies Office show.

It had a further $4.5m owed to it in accounts receivable, mostly from other companies in the Gelita group.

The factory made $1.6m last year from $22.3m revenue. Its 2011 result, a $6.7m profit, was distorted by insurance payouts and earthquake expenses and writedowns.

In 2011 it settled its February quake insurance claim for $9.3m, although it spent $2.3m in extraordinary earthquake expenses that year. Last year it received another $286,000 from its insurer for claim preparation costs.

It has two other claims outstanding for the replacement of its hide store roof, which collapsed under the weight of snow in August 2011, and for damage from the June 2011 quake.

The factory, which is the only gelatine company in New Zealand, has $27.1m in assets and no borrowing.

Plant and equipment bought for $15.1m has been depreciated to just $3.8m, while a further $6.1m of assets were past the end of their useful life but still in service.

The company, which is wholly owned by its German parent, has to disclose its finances because it is more than 25 per cent owned by a foreign company.

- The Press

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