WEDNESDAY, JUNE 17, 1964. Cement Shortage

Press, Volume CIII, Issue 30469, 17 June 1964, Page 16

WEDNESDAY, JUNE 17, 1964. Cement Shortage

As recently as July last year the chairman of one-New Zealand cement company complained that his firm’s plant had not been fully occupied in the previous 12 months; and the “ excess capacity ” of the industry last year drove two firms into a merger. Now, less than 12 months later, there is a shortage of cement. This dramatic change illustrates the speed of developments in the building and construction industries in that period. The demand for cemeftt in New Zealand depends on the construction of new power stations, and on industrial, commercial, and domestic building. In the last 12 months work on Benmore (which, because of its earth dam, requires comparatively little concrete), Aviemore, Aratiatia, and Matahina has required large, quantities of cement. Requirements for these and other large projects (such as the Lyttelton road tujmel) vary considerably from one year to the next; but they are known in advance and the cement industry gets ample warning of denfands from these sources. Home-building takes a more • constant quantity of cement, though the quantity has risen in recent years with the increasing popularity of masonry blocks. Industrial and commercial building is the big unknown in the equations of the cement industry’s planners. ■ •

The value of building permits issued for new factories, offices, and shops is a reliable “leading “ indicator ” of activity in the commercial building sector, but not merely of Cement usage in this field. The value, of permits issued, for commercial building in the larger centres in the year ended March, 1964, increased by £8 million or 18 per cent. This* must have entailed at least a 20 per cent increase in cement usage for commercial constructidn, for a high proportion of the new buildings in the main centres today are of concrete or concrete block. The upsurge in commercial building appears to have caught the cement industry napping, although it should have been apparent from such indicators as imports of reinforcing rods that a greatly-expanded output would be required this year. The issue of building permits for commercial building has recently declined in Auckland and Christchurch; but it may be many months before the demand for cement for commercial building shows any appreciable decline.

In the meantime, the demand for cement for large construction jobs is likely to be accentuated by construction on the Manapouri project. In short, the present cement shortage may become more acute before there is any prospect of alleviation, for the cement industry is producing at,‘or near, capacity now. In this situation the shipping of cement from Southland to Auckland would give only temporary relief. Further, New Zealand’s high freight rates would make Southland cement a very expensive product in Auckland. Japanese cement could, apparently, be landed at Auckland at half the cost of the Southland cement. There is no case for subsidising so heavily .the internal transport of cement.