The Awatoto industrial district, home of Bremworth in Napier, is still closed to everyone but those who need to be there - and who in most cases have to park on the other side of the railway line, beside State Highway 51. Photo / Warren Buckland
The Awatoto industrial district, home of Bremworth in Napier, is still closed to everyone but those who need to be there - and who in most cases have to park on the other side of the railway line, beside State Highway 51. Photo / Warren Buckland
Major Napier employer and carpet industry leader Bremworth hopes it will in the next two months be able to start making decisions on its future in Hawke’s Bay after the Cyclone Gabrielle devastation of its Awatoto plant.
The February 13-14 storm closed the plant indefinitely and possibly permanently, and stopped production at Bremworth’s Whanganui and Papatoetoe plants, which relied on Awatoto’s output, putting about 300 jobs at risk, including 136 in Napier.
Bremworth chief executive Greg Smith said the company’s insurance package, covering not only damage to the site and equipment but also business interruption, meaning staff are being paid, provides some security in the crisis.
He says as much as a third of the staff have been involved in the vigorous and minute clean-up at the site, dressed in full PEP gear in the still red-zoned industrial area, highlighting the loyalty of staff who’ve worked at the site in the more than 50 years the plant has operated in Napier.
Many have been employed more than 20 years at the site, some more than 40 years, and Smith says: “This is their home”.
The future of the operation in Napier depends on a balanced assessment of everything from the tiniest parts of swamped machinery, to buildings, the wool markets, and the eventual designation of the Awatoto Industrial District, currently under a cloud because of contamination and potential future flood risk.
Bremworth chief executive officer Greg Smith.
Smith said Bremworth and a company it had contracted weremaking detailed assessments and hope the carpet makercould have enough information to start making decisions “within the next two months”.
Meanwhile, it is turning a “hybrid” supply model to create a “multi-million dollar export opportunity” after the cyclone, and which it says is set to provide a multi-million dollar boost to New Zealand’s wool product exports.
Business continuity plans will outsource part of its production process to domestic and international suppliers - as well as operating its own manufacturing facilities – and the company is in the process of signing a new licensing deal with a Canterbury textile firm specialising in processing natural fibres to enable Bremworth to process and dye wool fibre for its Whanganui yarn spinning facility.
It has also been negotiating with international suppliers to supply Bremworth’s remaining yarn needs - as well as providing significant additional capacity for growth, the company said to the markets.
Under the new deals, New Zealand wool fibre would be shipped offshore, dyed, processed into yarn, and returned to Bremworth to be made into the all-wool product to which it had committed in mid-2020.
Smith says the new hybrid supply model is complementary to its existing operations and allows them to source from local and offshore suppliers, and it will ensure the company’s residential supply chain is insulated from future events that could which have the potential to disrupt operations while also allowing them to enter the high-volume commercial export market.
“In Australia, where wool carpet demand is much higher than in New Zealand, we believe that securing large-scale contracts could increase our revenue by tens of millions of dollars annually,” he said.
“While the short-term impact of the cyclone on our business has [disrupted] our supply chain, the changes we are now implementing as a consequence will mean we are a more resilient business and potentially unlock new markets.”
Although Bremworth lost aterial and product in the cyclone, the company has more than $16m of finished carpet inventory to service the market while new suppliers come on board, Smith said.
“The first trial of one of our most popular products produced by one of our international suppliers has been a success, which is comforting,” he said. “Based on what we know now we expect to be well positioned to meet the forecast increase in demand as flood-impacted homeowners look to replace their carpet over the coming year.”
