The Orawia factory of The Southland Cement Manufacturing Company - in operation 1956. This photograph courtesy of The Fletcher Trust Archive (New Zealand)
Photographs of this relatively recently built and also recently demolished cement factory are hard to find, but the construction of the plant was by Fletcher Construction - a well respected and long-standing New Zealand company started by James (later Sir James) Fletcher in Dunedin and the company has an extensive archive from which this and a few other photographs have been sourced for publication on these Panoramio pages. I acknowledge the assistance of The Fletcher Trust Archive to willingly make these photographs available so as to expand the understanding of New Zealand's industrial heritage.
A 16mm movie has also been uncovered and stills from this movie may be added to these pages in due course.
TEXT FROM - SPANNING THE CENTURIES, THE HISTORY OF MILBURN NZ Ltd by Morton Johnston and Chinn. Published by Milburn NZ Ltd ISBN 0-47308888-6 The small Southland Cement Company faced many difficulties before its eventual merger with Milburn - by then New Zealand Cement Holdings-took place, yet the desire for a local industry went back to suggestions by the Southland County Council in May 1925. Later, in 1938 and 1939, a company in Southland applied for a licence to manufacture cement at Lime Hills, Centre Bush, but the Bureau of Industry rejected the application. Investigations continued and a private company called Southland Cement Development Ltd was registered, with Hugh Ritchie as chairman. In 1949 the company was liquidated due to the tremendous number of difficulties encountered. Negotiations with the owner of the quarry had proved difficult, Ritchie explained, and prices of plant had doubled and delivery periods increased to several years. Ritchie remained confident that cement would eventually be produced in Southland,and a works would find"a ready sale for its output within the province". Ultimately a prospectus, dated 30th May 1955. invited subscriptions to an issue of 200,000 ordinary shares of £1 each. The promoters proposed to erect a cement works at Orawia to operate in conjunction with the Clifden Lime Company Ltd,which had been incorporated in 1936. Forty thousand £1 shares had been issued to the Clifden Lime Company for its assets and the lime business was to be carried on as part of the operations of the new company. Engineers designed the cement plant to produce a guaranteed minimum of 675 tons of cement a week with a probable annual capacity exceeding 40,000 tons. The contract with the builders, Fletcher Construction Company Ltd, provided that the contractors would hand over the plant only after it had been demonstrated to be capable of operation at the guaranteed capacity of 675 tons a week, working continuously. In the opinion of its promoters, the success of the venture was assured due to its raw material, the local cement-rock, the low cost of production, the low capital cost of plant and the support of the Southland public. There is little reason to doubt that the promoters were quite sincere, if mistaken, in their belief that the company would make good profits and that the dividend prospects were excellent. Their opinion seemed based on perfectly sound reasoning to anyone who had not had first hand experience in cement production and when this opinion was supported by the information of alleged experts it is not surprising that the promoters made optimistic forecasts. Most of the Southland limestone deposits have relatively high-grade material in the upper portion with lower-grade stone towards the base. Press reports announced that geological surveys by the Department of Scientific and Industrial Research at Orawia showed "a huge deposit of high-grade natural cement stone , entirely suitable for the manufacture of cement without the addition of marl". Experts also thought that a combination of the higher grade with the lower could be used. The impurities in the limestone existed in the right proportions to provide adequate correcting materials. However, unless the composition of a cement-rock is uniform throughout - which is rare - it is less desirable than materials which can be blended, such as a high-grade limestone and a suitable clay, particularly if the two materials are to be found in the same area. . The nature of the material in the Clifden deposit caused difficulty in quarrying and blending. The promoters anticipated low production costs not only because of the cement rock- which did not prove to have all the many advantages expected - but also because of a plentiful supply of suitable local coal. These advantages,combined with those claimed for the vertical kiln process adopted, in theory, added up to an impressive total. As it turned out the choice of a vertical kiln instead of the conventional rotary kiln was probably the main reason that the raw material and the fairly good coal could not be used to advantage to produce high quality cement. The choice of the vertical kiln process was based on information from a certain Dr Gottlieb, who had come to Australia after the war. He claimed that these could be erected cheaply and could use low-grade coals. One of these plants had apparently been set up in Gippsland and was claimed to be successful. The Southland Cement Company Ltd employed Dr Gottlieb as a consultant and he was also associated with Fletcher Construction Company Ltd in the installation of vertical kiln plants. In the Southland Cement Company Ltd prospectus Dr Gottlieb was quoted as saying that he had investigated the suitability of all types of kilns for the Southland project and was convinced that the vertical kiln was the right choice. Although most cement men understood that only low volatile fuels, such as anthracite, could be used with success in this type of kiln, the consultant claimed that the Southland coal would be satisfactory. He was mistaken, and although coke was later introduced, the kiln did not produce cement that could compete with the rotary kiln product. Other factors, such as inadequate facilities for blending the raw materials, only increased the difficulties, and the Southland company had to discard much of the clinker produced in the early stages. In October 1956 the "Southland Times" published a story about the Orawia works, which said production was expected to begin in January. The vertical kiln plant was capable of turning out 40-45,000 tons of cement annually, using a dry process to burn the Clifden limestone. This natural cement stone was to be crushed and ground, "...to about the consistency of flour. Coal is added to the limestone and it goes then to a noduliser,a huge revolving circular plate with sides,where it is sprayed with water and forms small balls or nodules about half an inch in diameter. As the noduliser spins on an angle it spills the nodules on to a spreader, thus feeding the kiln. The kiln has a rotary reversible grate with forced draught attachment and is fully automatic, with push-button control. The incoming forced draught is preheated by the cooling clinker, passes through the fire zone near the top of the kiln and dries the nodules for burning. Virtues of the vertical kiln method are economy of production and a high grade cement with the advantage of a low alkali content". Low capital costs were based on the use of these vertical kilns". No doubt the capital outlay for a rotary kiln of similar capacity would have been at least twice as much, although actual costs would have been higher had the vertical kiln been provided with more adequate blending and storage facilities. There is little doubt that good cement could have been made at Orawia with a rotary kiln, although the alkali content may have been high. Whether the capital could have been raised, and whether a small rotary kiln plant would have been.economic, is at least questionable,especially as the location at Orawia was not ideal for distribution. .Markets for the finished product,and adequate low cost transport to them, are as important as the raw materials and manufacturing techniques. The company had depended on the support of the local population. Among these,even the local Milburn cement distributors were to a degree sympathetic with the new venture and made arrangements to be allowed to act as agents for both cements. It is almost certain that the Southland public - known as consistently loyal to local enterprise-would have supported the local industry properly if they could have. If so it might have been possible to find a much wider market, possibly including local body and Government contracts. As it was, the failure to sell adequate quantities of the cement soon led the management to try to alter existing market prices. Some two years after manufacture began a deputation from Southland, together with representatives from Fletchers, met Milburn representatives, claiming that the arrangements which had been made were restrictive and suggesting that Milburn should limit its sales in Southland. In 1958, at further discussions, an unofficial suggestion came up that as the Southland company was in a desperate position it might be possible to put the plant into "moth balls" for a time, with Milburn paying the standing charges until the demand for cement increased. The Milburn directors discussed the amount which might be offered "taking into consideration the value accruing to the Milburn Company for additional sales if the Southland Plant ceased operations or alternatively, continued manufacturing at a certain output," but decided not to act unless a definite proposal came from the Southland directors. In 1959 the demand for cement exceeded supply, mainly due to the Benmore project. Milburn had just decided to approach the Southland company to try to purchase it when the Southland company's financial adviser notified Milburn that he was going to recommend that Southland reduce the price of its cement by £ 2 a ton, but that this action would not be taken if Milburn agreed either to distribute 20,000 tons of Southland cement or negotiate some other agreement which would enable Southland to better its position. Milburn decided to proceed immediately with the approach to Southland. The chairman and deputy chairman of Milburn discussed the question of purchase with the chairman and the financial adviser of the Southland company. The Milburn directors decided to make an offer to Southland of one Milburn share for eight Southland shares. In the meantime, Milburn's management and Barr Burgess & Stewart examined the Southland company's affairs and its plant. After studying the reports the Milburn directors decided at a special meeting to increase the offer to two Milburn shares for thirteen Southland shares. In return the Southland directors were to agree to recommend the Milburn offer to its shareholders unreservedly The offer would not be binding unless accepted by 90% of the Southland company's shareholders. Milburn agreed that in the event of purchase, the works at Orawia should continue to operate and that arrangements would be made for local representation on the Milburn board. A deed of contract, by which Southland directors bound themselves to do all in their power to recommend the offer to the shareholders, was drawn up. An extraordinary meeting of the Southland Cement Company was held in Invercargill on 8thDecember 1959 to consider the Milburn offer. Apparently at least one prominent Southland director, in spite of the agreement, had actually canvassed Southland shareholders opposing acceptance and the meeting was adjourned until a committee could "go into the whole question and report on the position of the undertaking and the offer made by Milburn". Both the bank and the Fletcher organisation,which were substantial creditors, supported the Milburn offer. At a special meeting of Milburn shareholders, the company's financial adviser said that both he and his Southland counterpart thought that Milburn still had a chance to securing 90% acceptance. Milburn decided to extend the expiry date from isth December 1959 to 31st January 1960. About 40% had voted in favour by the time of the Southland meeting. In February 1960 Milburn was asked whether it would be willing to increase its offer. It refused. At a meeting of its shareholders on 26thMarch 1960 the Southland Company decided to carry on. The capital was written down by 10 shillings a share, an equivalent amount in new 10-shilling shares created for issue to existing shareholders and to the public. In June a meeting of representatives of Milburn and Southland Cement agreed that the Southland board would again discuss the merger and that Milburn would consider a proposal. Acquisition of the company followed reasonably shortly thereafter.
I am advised by an Oamaru local whose father was associated with the Te Kuiti plant built by Fletchers, to the same design, for The Waitomo Cement Manufacturing Company, that both the Orawia and Waitomo factories were purchased by a man named Richwhite (father of David Richwite of financial fame in NZ [Fay Richwhite] and immediately closed. Milburn Lime and Cement had nothing to do with either the closure nor the acquisition of assets. I have no corroborative evidence at this time.