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Smelter plans big spendup
Edited by : AL CIRCLE
3 min read
The Tiwai Point aluminium smelter has ramped up its capital expenditure and is planning to spend about $80 million annually for the next four years, with southerners expected to benefit.
New Zealand Aluminium Smelters is anticipating doubling its normal spending until 2015 after it secured a long-term electricity contract with Meridian Energy, ensuring power for the smelter until 2030.
New Zealand Aluminium Smelters general manager Ryan Cavanagh said the smelter typically spent $30 million to $50 million annually on project work and rebuilding aluminium cells, but last year spent about $76 million, and now the company had certainty of power its future looked safe, so he expected it to spend a similar amount, if not more, this year.
The outlook for the next few years was good because of strong demand for metal, and the smelter had also secured a new product from a sister smelter in Canada to produce billets – long cylinders of aluminium – for the Japanese market, Mr Cavanagh said.
However, smelters worldwide had closed in the past few years because of the global downturn and things could change, so the expenditure was still based on the markets, he said.
"We cannot control the metal prices, but at the moment it is healthy. As long as that continues we will too," Mr Cavanagh said.
The increased expenditure would not mean new jobs at the smelter, but it was good news for the community because businesses in the south typically tendered and picked up contracts for project work, he said.
"Our local contracting firms are very successful with getting this work ... [so] a fair whack of that money is retained locally," Mr Cavanagh said.
Project work included buying and installing new cranes on the production lines and putting in a new ship unloader, he said.
Venture Southland enterprise and strategic projects group manager Steve Canny said the increase in the smelter's capital expenditure was great news for the region because it showed the smelter was committed to investing in its future.
The smelter produced about 14 per cent of the region's gross domestic product and was a major contributor to the economy through jobs and the flow-on effects on the service industry, Mr Canny said.
Invercargill-based engineering business George Wilson and Sons workshop manager Rex McDonald said the smelter's increased spending was great news for Southland.
Work had quietened down in the past few years so any ramping up of the industry or flow-on effects were good, he said.
New Zealand Aluminium Smelters is anticipating doubling its normal spending until 2015 after it secured a long-term electricity contract with Meridian Energy, ensuring power for the smelter until 2030.
New Zealand Aluminium Smelters general manager Ryan Cavanagh said the smelter typically spent $30 million to $50 million annually on project work and rebuilding aluminium cells, but last year spent about $76 million, and now the company had certainty of power its future looked safe, so he expected it to spend a similar amount, if not more, this year.
The outlook for the next few years was good because of strong demand for metal, and the smelter had also secured a new product from a sister smelter in Canada to produce billets – long cylinders of aluminium – for the Japanese market, Mr Cavanagh said.
However, smelters worldwide had closed in the past few years because of the global downturn and things could change, so the expenditure was still based on the markets, he said.
"We cannot control the metal prices, but at the moment it is healthy. As long as that continues we will too," Mr Cavanagh said.
The increased expenditure would not mean new jobs at the smelter, but it was good news for the community because businesses in the south typically tendered and picked up contracts for project work, he said.
"Our local contracting firms are very successful with getting this work ... [so] a fair whack of that money is retained locally," Mr Cavanagh said.
Project work included buying and installing new cranes on the production lines and putting in a new ship unloader, he said.
Venture Southland enterprise and strategic projects group manager Steve Canny said the increase in the smelter's capital expenditure was great news for the region because it showed the smelter was committed to investing in its future.
The smelter produced about 14 per cent of the region's gross domestic product and was a major contributor to the economy through jobs and the flow-on effects on the service industry, Mr Canny said.
Invercargill-based engineering business George Wilson and Sons workshop manager Rex McDonald said the smelter's increased spending was great news for Southland.
Work had quietened down in the past few years so any ramping up of the industry or flow-on effects were good, he said.
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