Sharechat Logo

Westgate cuts costs

By Graeme Kennedy

Friday 6th June 2003

Text too small?
Westgate Port Taranaki has restructured its business with cost cuts, price increases and continued diversification to offset rapidly declining export volumes from the Maui gasfield.

Maui has for more than 15 years provided 90% of the port's volumes and 60% of income and its winding down will slash revenues this year by $7 million and almost halve liquid fuel and gas exports by two million tonnes.

However, the Maui-generated cargoes are being replaced by spectacular growth in other sectors, including containers, logs and fertiliser.

Westgate business development manager Jon Hacon said the new strategies included the port's first price increases since it became a company 15 years ago, with charges adjusted to match the cost of services.

Mr Hacon said Westgate had avoided price rises by continued efficiency gains ­ the company in 1985 employed 500 workers and handled one million tonnes of cargo while it now had 100 staff and a five million tonne throughput.

"But you can take efficiencies only so far before you have to raise prices," he said. "We looked at where we were losing money and applied the pricing to service costs ­ there is no real average increase as they vary depending on the type of ship and trade."

He said the new rates, effective from July 1, were struck after talks with individual customers.

New Zealand's second-biggest export gateway after Tauranga, Westgate began planning for diversification away from Maui several years ago and opened its Blyde container terminal in 1998 to handle the growing trade.

Container traffic has increased 750% from 6000 TEUs (20ft equivalent units) in 2001 to an expected 45,000 TEUs this year, driven mainly by dairy exports and Fonterra's increased use of the port as the company improved its logistics and supply-chain management.

"We are 60km from the world's biggest milk powder plant at Hawera," Mr Hacon said. "Just two years ago we were handling 18% from the plant and now it is 80%.

"Log shipments are up 400% as forestry blocks are now coming to maturity and fertiliser volumes have increased 40% with Ravensdown Fertiliser having us and Napier as their two hub ports."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Finzsoft blocked from quitting credit unions contract over Christmas
China Unveils Plan to Reduce Single-Use Plastic by 2025
20th January 2020 Morning Report
Rio Tinto reiterates Tiwai position as aluminium prices stay weak
TIL downgrades earnings by up to 40%, suspends first-half dividend
Govt accounts unexpectedly in the black as lumpiness continues
17th January 2020 Morning Report
Gentrack loses investor support with vague downgrade
Margin pressure continues at Michael Hill although sales rise
House prices hit fresh records as sales stepped up in December

IRG See IRG research reports