World glut forces 10% output cut

Press, Volume CXI, Issue 32778, 1 December 1971, Page 2

World glut forces 10% output cut

(New Zealand Press Association) INVERCARGILL, November 30. Potential output from Comalco’s Tiwai Point smelter will be reduced about 10 per cent next year because of the decision to postpone commissioning the second stage of potlines.

The initial plant is working at an annual rate of 73,000 tons, using 204 furnaces. An additional 102 furnaces are involved in the second stage of commissioning and they are expected to raise the smelter’s annual production to 110,000 tons.

The postponement, for “some months,” was announced at the official opening of the smelter today.

The chairman of New Zealand Aluminium Smelters, Ltd, and Comalco, Ltd (Mr D. J. Hibberd), at the same time said that Comalco would close half a potline at its Tasmanian smelter.

The cut was being made to help reduce the world oversupply of aluminium in an effort to balance supply and demand, he said. The-

measures were forced by a lack of growth in consumption, and increased production from a spate of new commissionings throughout the world. “This has caused very large surplus stocks and almost unbridled competition, with a decline in prices to almost catastrophic levels,” Mr Hibberd said.

Although it had been decided yesterday to delay commissioning the second stage, construction was continuing and would be completed as planned. Mr Hibberd said that the

“pain and expense” of shutting the facilities in Tasmania was greater than was involved in deferring the start of new capacity at Bluff. / i He emphasised that the company was making the contribution to help achieve a balance in world supply and demand, and to improve export prices “which is in New Zealand’s interests just as much as the company’s.” Plaque unveiled The opening of New Zealand’s largest industrial undertaking was performed by the Prime Minister (Sir Keith Holyoake). About 250 guests watched him unveil a

commemorative plaque at the western end of the huge potroom housing the No. 28 potline at the smelter. Representatives of the Japanese partners in the project, the chairman of Showa Denko KK (Dr M. Anzai) and the president of the Sumitomo Chemical Company, Ltd (Mr N. Hasegawa) were among those seated with the speakers.

Several international aluminium executives, and New Zealand Government Ministers, attended the' opening and were shown around the smelter after the ceremony.

“Success story”

The opening marked a significant milestone in New Zealand’s progress as a mature nation, said Sir Keith Holyoake. Private and Government finance and effort was involved: in a very real sense every New Zealander was a shareholder in the vast enterprise. It was a great success story after many years of hard work. New Zealand sincerely regretted the announcement that potential production of the smelter would not be fully used for a time. It would be rectified, everybody hoped, in the not too distant future. Export growth Manufacturing had a long, honourable history of imagination, initiative and enterprise, and the manufacturing sector had been growing rapidly in spite of rising costs and prices of raw materials, said the Prime Minister. Over the last decade the average annual growth rate in the volume of production had been 6.3 per cent. Manufacturing now contributed about 22 per cent of New Zealand’s income—more than 11 per cent of export earnings—and employed more than 27 per cent of the labour force.

Exports of manufactured goods had risen nearly s2om —to sl3Bm—in the year ended in May, 1971.

N.Z. resources

In the smelter, New Zealand had a unique industry, Sir Keith Holyoake said. The raw material was being imported but the finished product was exported after being processed by New Zealand’s power and labour.