Ballance’s Kapuni plant to shut down temporarily in January

Monday, 25 August 2025

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The temporary closure of Ballance Agri-Nutrients Kapuni urea plant is on the cards in January, the co-operative says.

Ballance chief executive Kelvin Wickham told The Post the plant would shut down as it looked for alternative gas suppliers in an uncertain market.

The announcement came as the co-operative’s 2025 financial results revealed an $88 million write-down on the Kapuni plant.

The plant was down in value as a lack of gas supply meant it wasn’t manufacturing at full capacity, or profitability.

The Kapuni plant in Taranaki produces nitrogen urea fertiliser with New Zealand gas. But the site’s current gas supplier, Greymouth Petroleum, was a ending a five-year supply contract with the plant in September.

The write-down meant the co-operative’s farmer-shareholders would not be paid a rebate this year as the board considered it more prudent to “keep the funds and make sure the balance sheet is strong”.

Ballance was working with employees to plan the shutdown safely, it said.

“[Staff] are helping us plan a short-term shutdown because we have to make the plant safe, keep it in care and maintenance and available to start up.”

The shutdown would affect the plant’s 120-strong staff as well as a “much wider number of contractors and third-party suppliers in the Taranaki region”, the co-operative said.

Wickham said Greymouth Petroleum was taking its business elsewhere after the contract wrapped up.

“They’ve got better uses elsewhere for the gas, so we’ll be looking to find it from someone else for the near term and then keep working for a long-term contract.

“We’re still talking to a few parties about potential supply. Our aim is to get through the next period and then work towards a longer-term agreement.”

There had been a significant reduction in supply and the forward estimates of what was available across all the big suppliers, he said.

“For us to get a long-term agreement, we need more supply coming on, and there are people drilling wells.”

But Wickham said the result was solid despite uncertain gas supply.

The company made a net $49m loss in the year, down from 2024 when it made a $17m profit.

But revenue was up 4% this year to $965m, with debt down $78m.

That came down to strong commodity prices and increased demand for fertiliser from the agricultural sector, across horticulture, dairy, sheep and beef farming, he said.

“This season’s off to a good start. We’re positive that the core online businesses will deliver what we need to, but the challenge we have is gas supply, so we can keep the asset going.”

Agriculture was currently the shining light in terms of sectors that had confidence, Wickham said.

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