NZ ship’s future cemented

THE FUTURE of one of the few remaining New Zealand-flagged-and-crewed coast vessels seems assured after the government granted financial assistance of up to NZ $60 million to Golden Bay Cement.

The funds will support expenditure of up to $150 million by Golden Bay Cement through to 2040 in continued operations, optimisation, resilience and decarbonisation initiatives at its plant at Portland, near Whangārei, supplying nearly 60% of the cement used in NZ. It is the country’s only remaining domestic cement manufacturer.

Golden Bay Cement utilises Swire Shipping’s purpose-built 8,024 DWT self-discharging cement carrier Aotearoa Chief, which was delivered from Chinese builders in 2016 for a 20-year contract.

In a NZX announcement yesterday morning [20 July] GBC parent Fletcher Building said the agreement with the Government recognised the strategic importance of domestic cement manufacturing to NZ's infrastructure supply chain and national resilience and addresses the carbon cost disadvantage that GBC faces relative to imported cement.

Golden Bay Cement participated in an independent assessment which confirmed that without support, rising costs, including carbon costs, would force closure and a shift to an import-only model from 2030. That transparency underpinned a bespoke arrangement scaled to this specific risk, Fletcher said.  

“Domestic cement production matters for New Zealand's resilience as much as for its economics," said Andrew Reding, Fletcher Building chief executive and managing director.

“An onshore source reduces exposure to shipping disruption, supply shocks and price volatility, an increasingly important consideration as global supply chains become more unpredictable. Golden Bay Cement directly employs more than 150 people and supports a further 450 jobs across the Whangārei district, underpinning our ability to build homes, hospitals, roads and infrastructure with locally sourced materials.

“Without government support, increasing costs, including carbon emission costs that our competitors importing cement from overseas do not currently incur at the same level, would likely have required us to close the plant and move to an import-only model from 2030. This agreement removes that risk.”

Aotearoa Chief is tasked to carry more than 13 million metric tonnes over the life of its charter, according to Swire. In September 2019, it reached the milestone of carrying one million tonnes of cement, the equivalent of 40,000 truckloads, on its 135th voyage into Auckland. This was just 30 months after it went into service.

Swire Shipping declined to comment on yesterday’s development, which comes 10 days after subsidiary Pacifica confirmed the withdrawal of its last coastal containership, Moana Chief, after concluding its service was no longer viable.