Ballance Agri-Nutrients, one of New Zealand’s biggest fertiliser manufacturers, might have to temporarily close operations because of a shortage of affordable gas.
The Taranaki farmer- and grower-owned cooperative may have to close its Kapuni plant for up to four months. The shutdown could possibly result in job losses if the cooperative is unable to secure an affordable gas supply by next month.
Ballance chief executive Kelvin Wickham said the company is preparing for various possible scenarios and maintaining flexibility as its current gas supply contract approaches its end 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 added.
“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 that contingency nitrogen supplies have been secured for farmers and growers for the spring season, and Ballance’s industrial customers have arranged alternative sources for their GoClear customers.
While Wickham considers the situation disappointing, he said the company is fortunate to be in a solid fundamental position and has incorporated multiple scenarios into its forward planning.
The plant annually produced about one-third, or 260,000 tonnes, of New Zealand’s urea, which is used as a nitrogen-rich fertiliser. It employed 116 staff members.