Fletchers to spend $60m on Portland cement expansion

Increasing demand for cement from the building boom has prompted Fletcher Building to spend $60 million on its plant at Whangarei and a Swiss-owned producer to consider expanding here.

Mark Binns, Fletcher's chief executive of concrete, said last year was a record for Fletcher's domestic sales of cement at 673,000 tonnes.

But when the upgrade of its Golden Bay Cement plant at Portland, south of Whangarei, was completed, Fletchers would be able to produce closer to 920,000 tonnes.

The plant's coal-firing system and cooler have already been upgraded, but material-handling and cement-processing facilities are still beingimproved.

Golden Bay is the country's largest cement manufacturer and supplier.

Swiss-owned Holcim NZ was this week reported to be considering building a second $100 million plant to double its capacity and reduce shipping and import costs.

It is looking at sites in the South Waikato or King Country to be close to the coal, limestone and power used to produce cement. An alternative is to upgrade its Westport plant, which produces 500,000 tonnes of cement a year.

The company, part of the Swiss-based Holcim Group, imports between 100,000 and 150,000 tonnes of cement from the Philippines and Indonesia. But Holcim NZ managing director Rex Williams said he wanted the company to be self-sufficient.

Binns said Fletchers imported clinker - a raw material from which cement is made - from Thailand, but the expansion at Whangarei would resolve supply issues.

"The first stage of the upgrade has been completed and the second stage will be completed this year," he said.

Fletcher Building's latest annual report made note of Golden Bay's earnings growth being constrained by two factors: the need to import high volumes of clinker because of capacity constraints at its plant, and the higher distribution costs from increasing demand and a 33-day shutdown of its ship, MV Golden Bay, for an equipment replacement.

Supply network

* Fletcher Building's cement plant is at Portland, near Whangarei.
* Bulk cement is distributed to Golden Bay Cement's eight customer service centres around the country, then trucked to customers.
* The company's supply ship, MV Golden Bay, maintains silo levels in cement storage units at five ports around New Zealand.
* Cement is bagged at various service centres for export and domestic customers.
* The national support office, which also serves as a centralised order and distribution centre, is in Auckland.