Skellerup Group’s $50 million plan for a new rubber products plant was given final consents today.
Chief executive David Mair said while the building should be finished by December 2015 but a move from the existing Woolston site might not begin immediately.
“It’s a major effort to co-ordinate (first) satisfying customers … at the same time you don’t want to be running two sites for a long time,” Mair said.
The $50m included a $30m investment in the new facility at a Wigram industrial park and a further $20m on other items like the move of the staff and machinery from Woolston.
Skellerup received a $32.3m insurance settlement for damage at the old site. Consents had been received from Christchurch City Council.
“Given all the trouble the city council has had with the consent process and everything I believe we’ll be exactly on target,” Mair said.
Calder Stewart Industries will build the new dairy rubberware facility at the Wigram Business Park developed by Ngai Tahu Property. The site will mainly make rubber dairy liners for milking machines and rubber tubing used to take milk from cows in the milking shed.
But Mair said there were also potentially other products to be made at the 18,900 square metre facility, including dairy milk filters.
About 200 staff were due to move, although some might consider their employment options given the extra journey, Mair said.
Skellerup’s agribusiness sales were split about 26 per cent to New Zealand, 25 per cent to Australia, he said.
The other markets with growth potential were the United States (with 24 per cent of revenues) and Europe, United Kingdom and Ireland (19 per cent). China was also a target, but “a tough market”.
“The international market still has back winds with the demand for protein out of China and that’s likely to continue for a period of time. Even if it doesn’t the wall of milk coming out of Europe (is there) … The increase in dairy is good for Skellerup internationally,” Mair said.