The merger of the world’s biggest cement makers, Lafarge and Holcim, has had a significant impact on the way this country sources its cement. CHRIS WEBB explains.
THE MERGER OF LAFARGE AND HOLCIM a year ago represented a quantum leap for the duo, providing LafargeHolcim with unrivalled market access as a supplier of cement, aggregates and construction-related services, represented in 90 countries on all continents, with 115,000 employees.
The merger also brought to an end an era which had small beginnings in Otago in 1888, when Holcim New Zealand became a cornerstone of the country’s construction industry, subsequently employing around 340 people at 23 sites, including Holcim Concrete.
Holcim has now closed its 58-year-old Westport cement works and significantly increased its storage capacity with two new, 30,000 tonne, cement storage silos – one in Timaru and one in Auckland – to provide a total capacity of around 100,000 tonnes. A long-term cement supply arrangement with Mitsubishi Materials Corporation of Japan will ensure ongoing supply for the country’s booming construction market, says the company.
The ‘Swap’ agreement with Golden Bay ended last year.
A year ago, when LafargeHolcim merger events were held all around the globe, Kiwi contractors were told there would not be “many noticeable changes for Australasia in the short-term”, as Lafarge wasn’t previously operating in this part of the world. It would, however, afford access to a huge technology base and research and development facilities.
This ‘business as usual’ prediction has, by most accounts, come true.
Rob Gaimster, chief executive of the Cement and Concrete Association (CCANZ), who in the June issue of Contractor, commented on a ‘Resilient Concrete Research Roadmap’, says the transition from local production to offshore outsourcing appears to have taken place “seamlessly”.
Bob Officer is Allied Concrete’s general manager (markets and quality) and a councillor at NZ Ready Mixed Concrete Association. “As a company we’d known about the changes since 2013. We don’t anticipate any problems with the change to global resourcing. It’s business as usual,” he says.
Mark Campbell, chief executive of Holcim New Zealand, says he is pleased with how the transition to the new business model is going here. The majority of Kiwi customers, he says, will be “transitioned” to the new cement supply programme by the third quarter of this year.
“Feedback from our customers about the transition process and our product has been very good,” he adds.
New cement terminals
The first of the two new, dome terminals, costing $50 million each, became operational in Timaru back in February and has already received its third shipment of cement from Japan. Holcim says it is targeting 18 in-bound ships a year to Timaru with its own Milburn Carrier II shipping out-bound orders.
A second dome terminal at Auckland opened last month, completing a three-year build project for terminals that were on time and within budget.
The Auckland dome is able to take 30,000 tonnes of cement sitting on two sloping floors, fitted with an aerated floor to ease the flow to two outlets. From the outlets the cement is pumped to a 300-tonne bin for collection and distribution by tankers, and the simple process is fully enclosed.
Construction of the domes, says LafargeHolcim, has a lot of advantages over conventional silos, including a small footprint and height, a relatively short construction time and high environmental standards. After the 2mm polyurethane skin was inflated in August last year at the Auckland site, it was sprayed with an insulating foam and reinforced with 500 tonnes of steel and 110 cubic metres of shotcrete, to a thickness of about 600mm.
Construction commenced in September 2014 with Beca as designer, Downer as main contractor, and Van Aalst Bulk Handling of The Netherlands as major equipment supplier.
The state-of-the-art cement storage dome at Timaru represents a first for this country. The storage silo was supplied by Domtec, USA, and is believed to be the first such dome silo to be constructed in this region. The dome was formed from an outer PVC layer that was inflated and sprayed on the inside with a polyurethane layer to act as a stabiliser and insulator. The dome was then constructed from the inside using approximately 450 tonnes of steel reinforcing and concrete, which was applied in the form of high-quality shotcrete.
The Timaru and Auckland dome silos are not identical due to area constraints in Timaru and height restrictions in Auckland. Each took some three months to construct, after which a fully aerated floor was installed to fluidise the cement for ease of flow and to ensure that the dome can be completely emptied.
Most of Holcim New Zealand’s South Island customers are now being supplied through the Timaru terminal, and the supply of cement from the new Auckland terminal to the greater Auckland market along with other parts of the North Island started last month.
When asked if the price of cement will be more expensive for customers in provincial areas such as Hawkes Bay and Taranaki where it is delivered by road, Holcim would only say; “We will continue to price our cement competitively in the markets we operate in.”
The Auckland terminal will receive a shipment of cement around once a month, with most of the cement going to supply the local Auckland market. Holcim’s two full-time terminal employees have been working onsite for a number of months to ensure they were involved in the commissioning. Another 14 staff (sales, technical and laboratory) are also based at the new terminal.
Supply from Japan
LafargeHolcim has entered into a long-term cement supply agreement to source cement for our market from a strategic partner in Japan, namely the Mitsubishi Materials Corporation (MMC). In the interim, Holcim is shipping cement to Onehunga, though this is coming to an end as the new Auckland silo is commissioned. Holcim says it will continue to have a presence at Onehunga as the cement bagging plant will continue to operate from the current site.
All cement is tested in Japan and then again when it arrives here. “The supplier appears to have gone to great lengths to ensure compatibility with the New Zealand market in terms of performance,” notes Rob Gaimster. “Setting times, colour, etc, are in accordance with what the market is familiar with.”
Holcim NZ country manager Glenda Harvey says the company currently sources PFA for New Zealand customers on an as-required basis and will continue this arrangement.
“We also supply customers around New Zealand with Duracem,” says Glenda. “It’s a high slag cement for use where durability is required. Rapidcem is a special purpose cement designed for use in precast concrete or other specific applications requiring high early strength.”
Another product is Ultracem, a Holcim brand that is well known to the market, is a general purpose Ordinary Portland Cement (OPC), which has been a mainstay in the construction industry and in residential use for years. It was developed to exceed NZ’s cement standard in a tough climate, and will remain available.
Job losses
Many have lost their jobs as a result of the Westport closure. Robyn Flynn, a spokesperson for Holcim New Zealand, confirmed all the 105 staff (and contractors) employed at Westport lost their jobs at the end of June when the works closed.
She told Contractor: “Some have been deployed elsewhere in Holcim, some have already gone to other jobs, some are retiring, some have got jobs lined up to go to, and others haven’t got anything confirmed. We have spent a lot of time helping our staff with the transition phase.”
According to news sources plans were under way for the plant to be demolished and the quarry site rehabilitated sometime towards the end of the year.
Holcim owns over 500 hectares of land around Westport, including the Cape Foulwind cement plant and quarry, 11 houses at Cape Foulwind, and a rail siding near Westport. The company says no decisions had been made on the future of its land and assets in Westport.
The cement works were the main sources of income for the Buller District Council, which owns the port. It hopes someone will find a new economic use for the old plant.
“Feedback from our customers about the transition process and our product has been very good.”
Parting words from Jeremy Sole- a final column