Temperzone threatens to leave NZ

By DITA DE BONI

The country's largest air conditioning manufacturer is threatening to move across the Tasman with the loss of 250 jobs unless it can convince the Government to relax restrictions on a gas crucial to its production.

Mangere-based Temperzone, which manufactures and distributes $50 million worth of air conditioners and ventilators each year for local and international markets, says the Government is unfairly restricting the amount of R22 gas, the material used to power its units.

R22 is being phased out internationally in accordance with the Montreal Protocol. First signed in 1987, the protocol aims to gradually eliminate the use of ozone-depleting substances.

Both chlorofluorocarbons and the slightly less ozone-depleting hydrofluorocarbons - including R22 - must be phased out by 2015, although Third World countries are able to use hydrofluorocarbons such as R22 until 2030.

But Temperzone charges that it is not the phase-out that will put it out of business but the speed at which officials have tried to stem the use of the ozone-destroying substances.

In New Zealand, companies use 50 per cent less R22 than what is permitted under international environmental law, with the Government holding 90 tonnes of the gas that it has not allocated.

Temperzone governing director and founder Eric Kendall says the dispute is forcing the company to reassess its future in this country.



"It's the bureaucrats - they don't seem to understand or want to take up our problem.

"We've been trying to tell the Government for five years that we need to ensure a supply of R22 to keep going, and now we are getting dangerously close to running out."

The Government at present buys up quotas of chemicals being phased out as companies switch to more environmentally friendly materials. Temperzone has a permit for 13.5 tonnes of R22 and, because permits can be traded, has been able to buy other permits for 14.5 tonnes.

But the company needs around 44 tonnes a year to keep up with orders.

Temperzone exports around 80 per cent of its product each year, and has a satellite plant in New South Wales that employs more than 100 people.

Both management and union representatives are upset that products containing R22 gas can be imported from other countries, such as India and China, who are also Temperzone's primary competitors in the Pacific Rim.

"It's not a level playing field," says the National Distribution Union's Bruce Fowler, who represents workers at the site.

"The countries that have until 2030 to phase out R22 are the biggest suppliers of air conditioners for export and we have to compete with them."

The company agrees it must eventually look to alternatives, but says it cannot at present buy compressors and other componentry to handle the replacement material.

"Alternative refrigerants are around five or six times the cost of R22," Mr Fowler says.

"Gas allocations in New Zealand are restricted while there are no restrictions on foreign companies. It's ridiculous."

Lindsey Roke, chief engineer at the Fisher & Paykel refrigeration division, says it is true that the country is importing Asian products with R22.

But he says most people in "First World" countries have started to switch over, and all companies will have to face the issue at some point.

"F&P had big set-up costs when they phased out chlorofluorocarbons, but surely Temperzone wouldn't, because all they need is a new compressor, not a whole new load of manufacturing equipment, to use R22 alternatives."

Alison Handley, senior policy analyst on waste and pollution with the Ministry for the Environment, agrees, saying "industry has had some time in order to look around, find alternatives and adjust and gear up for them."

A senior policy adviser at the Ministry of Economic Development, Terry Collier, says the Government has taken note of the problems of Temperzone and other companies.

But it will be the middle of next year before any extra allocation of R22 is made available to those companies.

Before then, officials are required to consult all interested parties on the criteria for allocation and then receive submissions from firms needing the extra material.

Those companies already working on transition plans to use R22 substitutes were likely to be looked on more favourably, Mr Collier says.

Mr Fowler says Temperzone and unions represented at its plant are so determined to keep the company operating in New Zealand that they will be undertaking some "more persuasive" measures if the rules governing R22 do not change.

He says "Plan B"has the full support of everyone involved with Temperzone, including management.