COMMERCIAL D.B. Timaru brewery on stream next year

Press, Volume CXV, Issue 33786, 7 March 1975, Page 11

COMMERCIAL D.B. Timaru brewery on stream next year

(From Our Own Reporter) TIMARU. Dominion Breweries, Ltd, is pressing full speed ahead with its construction of a Sl2m South Island brewery at Timaru, in spite of the Government’s rejection of S6m in loan aid.

“We have got to go ahead: 1 we have got to get the fin- 1 ance,” said the chairman ofj the board of directors of D.B. South Island Brewery. Ltd. (Mr W. S. Otto) after a meet-: ing of the board at Timaru yesterday which followed deliberations by the project committee on the new $ 11.4 m brewery at Meadows Road, Washdyke. Mr Otto said that applications had been made to the Development Finance Corporation and to the Department of Trade and Industry for a total of s6m first mortgage and suspensory loan support in accordance with the Government’s Regional Development scheme, but neither application was approved. Overseas finance In his capacity of generalmanager of Dominion Breweries, Ltd, Mr Otto said it was imperative that production commence at the new brewery to service South Island requirements from the 1976-77 summer onwards, if future rationing of the company’s products was to be avoided, and every endeavour would be made to fulfil this objective. "Negotiations are now in train for the procuration of 'off shore’ finance of $6,000,000 and as previously announced the balance of $5,445,000 required to complete the brewery project will be financed as to $4,000,000 by share capital subscription (D.B. 55 per cent, trusts 45 per cent) and as to $1,445,000 by Dominion Breweries or other back up second mortgage,” he said. Criteria met The applications were rejected partly because of their magnitude in relation to availability of funds, and partly because the commitment to proceed with the new brewery had been made by Dominion Breweries in association with the seven South Island licensing trusts some time before “regional development” support had been applied for. The reason for the delay in making the applications for financial support was a chain of special circumstances made known to the Government, Mr Otto said. The specified criteria had

been fully met by the new. brewery project: (a) Promotion of regional! industrial development • to sustain and increase' local employment oppor-! tunities, and to arrest ; population drift to the I larger cities, particularly! in the North Island; j (b) Promotion of better utilisation of national transport systems by regional decentralisation; (c) Contribution to maintenance and development of local housing, educational activities, and trade and commerce generally; Orders placed Site development works, including water, trade wastes and other underground reticulations, topsoil stripping, bulk earthworks and hard filling for building foundations, were well advanced and within specified time schedules. Plant and vessel requirements were being dealt with progressively: (a) Firm orders have been placed overseas for the Lenz brewery system, tubes for coal-fired boilers and stainless steel for fabrication of fermentation, cellar and other vessels. (b) In the near future orders will be placed overseas for bottling hall, refrigeration and other plant. Schedules revised Building design and specifications had been completed and were out to tender by a selected group of contractors recommended by the project engineers on the basis of their capacity to meet a necessarily very tight schedule for completion of buildings in time for commencement of in-plant construction of stainless steel vessels in November. The time schedule for coordination of building construction with vessel fabrication and progressive plant installation, and with installation of steam, refrigeration, electrical and other services had been revised and finalised. Unless any unforeseen delays occurred it was expected that the new brewery would be commissioned in July/August next year, and after the customary trial pro-

duction runs would be ready for full commercial production in August/September of the same year. In the first place, distribution will be 8m gallons i yearly, bulk beer being marketed from Kaikoura to Bluff.

In his statement, Mr Otto said that an indication of continued growth in sales of D.B. packaged beers throughout New Zealand was that for several years past the company’s group breweries had achieved a much greater growth rate than total industry expansion, and this notwithstanding tremendous difficulties in regard to availability of rail and shipping transport from Auckland.

“Because of this substantial growth in consumer demand, the D.B. plants have been operating at maximum productive capacity, especially during the six months of summer, but inevitably the company has had to resort to an equitable system of rationing, even when transport has been available. The North Island has been subjected to the same degree of rationing as has been applied in the South T sland.

“Some two years ago DB decided that transport problems, coupled with growing consumer demand, warranted decentralisation of its beer production. The new brewery at Mangatainoka commenced for the manufacture of beer in December, 1974, and will be in full operation by mid-April 1975. At this time, and for at least another year, it is expected that the Waitemata brewery will be able to fulfil market demand for its products distributed in the Auckland province and' throughout the South Island, subject only to transport availability for the latter area,” Mr Otto said.