Overseas investment decision for case 200810006 - Holcim (New Zealand) Limited

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background to the Investment:
Holcim (New Zealand) Limited (Holcim), through its operating divisions and subsidiaries, is involved in the manufacture and distribution of cement, the extraction and processing of aggregate, the manufacture of ready mixed concrete, the extraction and processing of limestone and the sale of all the above products. Holcim operates quarries from which it extracts and processes aggregates for supply. It manufactures cement at Cape Foulwind, near Westport, and transports it primarily by ship to a number of distribution outlets strategically situated around the country. Holcim currently produces approximately 500,000 tonnes of cement annually from its Westport works. Holcim, through its ready mixed concrete division, Holcim Concrete, operates a network of ready mixed concrete plants in Auckland and Hamilton.

Holcim's Westport cement works is presently operating at capacity and cannot meet current domestic demand, and it also has a limited economic life. Holcim has actively investigated its future alternatives, including a range of upgrade alternatives for the Westport plant, importing cement either to supplement the Westport operation or to replace domestic manufactured cement with imported cement and a new cement plant at Weston, Waitaki district, North Otago.

Rationale for the Investment:
Holcim proposes to establish and operate a cement manufacturing complex on land owned by Holcim adjacent to the Weston-Ngapara Road, Waitaki district. This site is situated some 3km northwest of the township of Weston and some 7km west of Oamaru. The land at Weston on which the plant and limestone, siltstone and tuff quarries is to be sited is zoned Rural General (Rural G) in the Waitaki District Plan, and has had a special identification as a Cement Policy Area since the early 1980s. This identification specifically provides for the manufacture of cement and associated quarrying of raw materials. The coal and sand pit areas at Ngapara and Windsor are zoned Rural G.

The acquisition of the relevant land will assist Holcim is establishing an acceptable buffer zone between the Ngapara coal mine and neighbouring properties. Holcim advises that part of the land will be used for coal mining, stock piling, earthworks, drainage and associated activities. The establishment of the buffer zone is part of a commitment by Holcim to ensure that the social and environmental impact of the coal mine is minimised to the greatest extent possible.

The establishment of a new cement works, quarries and associated infrastructure in the Waitaki district is likely to result in the following benefits:

1. the creation of new job opportunities in New Zealand;
2. increased efficiencies to Holcim's New Zealand cement manufacturing operations; and
3. the introduction into New Zealand of additional investment for development purposes.