One of New Zealand’s largest fertiliser plants may need to temporarily shut down due to a scarcity of affordable gas supplies.
Taranaki farmer- and grower-owned cooperative Ballance Agri-Nutrients will be forced to shut its Kapuni plant for up to four months – potentially leading to job losses – if it’s unable to secure an affordable gas supply by next month, it said in a statement today.
The plant produced approximately one-third – or 260,000 tonnes – of New Zealand’s urea for use as nitrogen-rich fertiliser each year.
Ballance CEO Kelvin Wickham said the company was planning for a range of eventualities and keeping options open before its current gas supply contract ended on September 30.
“While New Zealand’s gas market is dynamic, the increasing pace of declining gas supply and the impact of this on price will continue to pose challenges for the energy sector and for New Zealand,” he said “Although we remain optimistic about securing short-term supply, we’re also pragmatic and planning for other outcomes.
“Right now, it’s prudent to plan for a short-term shutdown,” Wickham said.
“We recognise the significant impact even a short-term shutdown would have on our employees, shareholders, the wider agricultural sector and the Taranaki regional economy. Like many businesses we’re impacted by dwindling New Zealand gas supplies.”
Wickham said contingency supplies of nitrogen has been secured for farmers and growers for spring, and Ballance’s industrial customers have sourced alternative supplies for their GoClear customers.
“While this situation is disappointing, we’re fortunate our business is in a strong underlying position and we’ve factored various scenarios into our forward planning.”
The Kapuni urea plant began operations in 1982 and employed 116 people.
