Tauranga 'game-changer' to boost Timaru port's 2015 profit   18 Sep 2014

Article - BusinessDesk

Tauranga 'game-changer' to boost Timaru port's 2015 profit

By Tina Morrison

Sept. 18 (BusinessDesk) - PrimePort Timaru, the South Island hub which has aligned itself with Port of Tauranga, expects a turnaround in its fortunes as it benefits from its tie up with the country's busiest export port.

The Timaru port posted a 12 percent increase in profit to $1.9 million in the year ended June 30. It expects profit to rise further in 2015 as it benefits from increased shipping traffic coming from its link with Tauranga, chairman Roger Gower said.

In the past year, PrimePort sold half its shares and leased its container terminal to Port of Tauranga in an attempt to drive more business through its operation. Port of Tauranga then inked a 10-year deal which will see more business coming through PrimePort from the Fonterra Cooperative Group and Silver Fern Farms-led Kotahi freight management partnership, which involves the venture taking a half share of the Timaru terminal.

Kotahi agreed to ship containers with Maersk Line, the world's largest container shipping company, which last month introduced its weekly 'Northern Star' service out of Timaru and is set to boost activity in the current financial year.

PrimePort says the deals position it as the prime central hub of the South Island as it acts as a feeder for Port of Tauranga, which is dredging its shipping channels to make them big enough for a new generation of larger container vessels.

"Tauranga is a hub and we can feed that hub from Timaru by sea so it brings in a whole new logistics chain," Gower said. "Those larger ships and other lines that are serving Tauranga, we will be able to feed those from Timaru, so that will give them direct connections to the world. It is quite profound. We think it is a game changing investment."

The Timaru port expects container volumes to return to record levels of 80,000 this financial year, last seen in 2008, Gower said. Container throughput dropped to 22,000 in 2013, its lowest level since 2001, after the port suffered a series of setbacks following the decision of Maersk and Hamburg Sud to stop calling at Timaru and Fonterra's 2009 decision to transport its products via Kiwirail to rival Port of Lyttelton for five years even though its Clandeboye plant, the world's second-largest dairy processing site, is closer to Timaru.

Non-containerised cargo handled through the port increased 35 percent to 1.27 million tonnes last financial year, led by increased volumes of fertiliser, stock feed and fuel to support the region's dairy industry. Export log volumes also increased on the back of strong demand from China and increased supply.

"Container volumes are growing quickly and on the back of that, breakbulk volumes are also growing," Gower said. "We are finding a lot of businesses are now wanting to expand in Timaru and the wider district because of the range of services that are now on offer. We think it's a real renaissance for us."

PrimePort, which ended the last financial year with no debt, expects to debt fund the $23 million construction of a new wharf for Holcim (NZ), slated for completion in August 2015.

Holcim is investing about $50 million to build a 30,000 tonne silo and distribution facility on land adjacent to the port terminal to create a distribution hub for the South Island and lower North Island, replacing its manufacturing facility at Westport. The facility is supported by a 25-year agreement and is expected to be in operation by the end of 2015.

The new facility, which is about to start construction, will initially handle about 350,000 tonnes of cement a year and is slated to underpin growth in PrimePort's bulk business for many years, Gower said.

PrimePort chief executive Jeremy Boys retired this week and is set to take up a new position as the port's representative in the Holcim construction project. Phil Melhopt will take over as chief executive in December. Melhopt is currently chief executive of the Central Otago District Council and has previously been chief executive of Timberlands West Coast and held senior roles with DB Group.

PrimePort expects further benefits from Port of Tauranga's $20 million investment in an 'inland port' at Rolleston, south of Christchurch, which will steer exports and imports to Timaru, and is slated for completion later this year.

(BusinessDesk)

Add a comment

News

Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students

29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more

New Zealand reaffirms support for Flight MH17 judicial process

7 Mar 2020 News By Rt HON WINSTON PETERS
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more

Business

NZ Government's Economic package to fight COVID-19

17 Mar 2020 Business News By RT HON JACINDA ARDERN
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more

NZ Government announces aviation relief package

19 Mar 2020 Business News By Hon Phil Twyford
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more

Living

Diversity was Key at New Zealand Trade Tasting in London

6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall. It was the first... more

Kiwi author stuns Behind the Butterfly Gate

12 Jan 2022 Arts By Charlotte Everett
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...  New Zealand writer Merryn Corcoran’s... more

Property

Fairer rules for tenants and landlords

17 Nov 2019 Property By Minister Kris Faafoi
17 NOVEMBER 2019 The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more

New Zealand Government will not implement a Capital Gains Tax

17 Apr 2019 Property By RT HON JACINDA ARDERN
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more

Migration

Boosting border security with electronic travel authority – now over 500,000 issued

19 Nov 2019 Migration By Hon Iain Lees-Galloway
19 NOVEMBER 2019 We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more

Christchurch reinstated as refugee settlement location

18 Aug 2018 Migration
18 AUGUST 2018 HON IAIN LEES-GALLOWAY The announcement that Christchurch can once again be a settlement location for refugees... more

Travel

Gallipoli Anzac Day services cancelled

19 Mar 2020 Travel & Tourism By RT HON JACINDA ARDERN
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more

New Zealanders advised not to travel overseas

19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas more

Sport

The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners

27 Oct 2019 Cricket By Charlotte Everett
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more

PREVIEW: All Blacks v England semi-final

26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade First published on Werewolf The ghastly likes of Marine Le Pen in France and Geert ... more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome Well um.. on the bright side, there (probably)... more

Kiwi Success

Congratulations to Loder Cup winner

26 Sep 2018 People By Hon Eugenie Sage
25 SEPTEMBER 2018 The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more

Appointments to New Zealand National Commission for UNESCO

16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO HON JENNY SALESA Associate Education Minister Jenny Salesa is... more

Recruitment

Historic pay equity settlement for education support workers

14 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more

Historic pay equity settlement for education support workers

22 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more