Citing unbearable electricity costs, one of Napier Port’s most important customers is considering shutting down and is now engaged in staff consultation.

Winstone Pulp International (WPI) accounts for 7-8% of Napier Port’s earnings, passing between 15,000 and 19,000 20-foot-equivalent units (TEU) of pulp and containerized timber through the Port. Its mills are south of Lake Taupo.

The five decades-long strategic relationship warranted the Port constructing purpose-built warehouses on site to efficiently manage WPI’s trade.

Emphasising “We don’t want to pre-empt any outcome of WPI’s current consultation process”, Napier Port CEO Todd Dawson told BayBuzz: 

“Our Port Pack facilities are essentially purpose-built warehouses that we developed as part of our partnership with WPI. They are built to a high standard and can be multi-purposed without too much difficulty if necessary and it could accommodate a number of cargo types and purposes. 

“We have a limited footprint on port and therefore space comes at a premium.  We currently have a number of customers using and wanting to use more storage and packing facilities, and a number of potential customers we’ve talked to for some time now who require a particular type of storage or space. 

“One of the positives of the past few years’ disruption is that we’ve become particularly good at adapting to fluctuations in cargo flows and managing space on port, and how we operate, dynamically.  As and when we need to adjust for customers and cargo types we do. Wood chips post cyclone are an example, and also using more space on port for logs that would normally be used for container storage.”

Energy prices have spiked as water levels have lowered in NZ’s hydro dam levels.

In the case of WPI, electricity costs have risen from 15% of costs to 40%, rising from $100/MWh in 2021, to averaging over $500/MWh for the month of August this year. Fingers are pointed in all directions as to who is at fault here, power generators, users, Transpower, government energy policy or lack thereof.

But for WPI, the issue is not new. As this article from 2004 reports, WPI faced the same power bill circumstances back then, with prices reaching $1000 MW/h, and shut down temporarily.

CEO Dawson made these broader observations about NZ’s infrastructure challenges:

“…this issue is not isolated to WPI and we are concerned more broadly for industries in Hawke’s Bay and New Zealand, who are facing the same challenges. Currently it’s energy-specific but other resource scarcity issues, such as access to water or reliable and resilient road and rail networks, could equally impact on sustainable industry growth nationwide. 

“In addition the need for our country (and its politicians centrally and locally) to embrace and focus their attention on maintaining core infrastructure and enabling the development of future infrastructure to support economic development and growth is vitally important if we are to avoid this situation happening again and again in the future.  Without this (and as we are seeing unfold), NZ becomes uncompetitive on the global stage. We rely on our export driven economy to generate the income needed to maintain the environment and way of life here in NZ.”