August 7, 2025 • 7 mins
The Kapuni urea plant, operational since 1982 and employing around 120 people, manufactures approximately one third or 260,000 tonnes of New Zealand’s urea annually, specifically for use as a nitrogen-rich fertiliser. Should an affordable and reliable supply of gas not be found soon, the plant is at risk of closure, says the chief executive of Ballance Agri-Nutrients.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
But let's kick it off with the Chief executive of
Balance Aggrenutrients, Calvin Wickham. Calvin, Gee, how many years ago
was it that you and I were chatting when you
were the I think the chief executive of Global Ingredients
or the boss of Global Ingredients for Fonterra A while ago.
Speaker 2 (00:17):
Good afternoon, Jamie. Yes, it was a while ago, probably
five or seven years back before I moved to Amsterdam
with Fonterra. Then coming back into the Balance role about
two years ago.
Speaker 1 (00:26):
Now, well you're the big dog, you're the top dog there.
I mentioned that the Capuna Urea Planters has been a
bit of a jewel in the in the Balance Agrinutrients
Fertilizer Crown because am I right in saying it's the
only place in New Zealand where we make your rear and.
Speaker 2 (00:45):
That is correct? So it provides about one third of
are you rare for New Zealand than two thirds to
be imported between ourselves and other players in the market.
So yeah, it's been certainly a key part of the
New Zealand scene to have some resilience locally and as
you know, definitely need night gen available for spring to
boost that past your growth and crop growth. We wouldn't
(01:05):
just want to be totally beholden on global supply chains
for our night gen.
Speaker 1 (01:10):
So are you going to have to mothball the plant?
Speaker 2 (01:12):
Certainly that's not the intense Jamie, and we've been talking
at the moment about a short term shut to help
us bridge the gap. We're looking some short term gas
supply as we look to find that probably the pretty
horrible price, but that does keep us going. And the
reason we're trying to bridge the gap is that the
market is very dynamic at the moment. There is some
talk about potential new supply coming on, there's potential other
(01:36):
demand side players may not be able to stay and last.
So if we can see our line of sight to
a year, there's opportunity potentially for us to find some
gas at affordable price. Because clearly we have to produce
you rere a international price. There have to be competitive
against those.
Speaker 1 (01:52):
Inputs obviously, but are you going to be able to
find gas at an affordable price? As I said, industrial
users are now facing fifteen to thirty percent increase in
gas prices, and.
Speaker 2 (02:04):
In some cases a lot more than that, So that
is a challenge at the moment I think it's perhaps
a bit distorted, and we would think that in the
maybe in a year's time it might look different. We
have to wait and see. And also it's not a
uniform price across the year. Certainly really peak high pricing
across window because the need for thermal generation for electricity,
(02:26):
but I can fall back to very low marginal cost
at other times of the year. So perhaps that's one
of the opportunities for us is how do we perhaps
instead of make a full year make do we make
on a seasonal basis and then supplement with imputs like
we do now.
Speaker 1 (02:40):
Do you praise the Lord for Shane Jones.
Speaker 2 (02:45):
Shane's got some good strong views out there, but I
suppose I can say it's great to see people looking
to take initiatives and looking to take some action, and
we applaud this government and any future government. So we
can look to find some solutions to what's really a
New Zealand energy issue here. How do we have reliable,
affordable energy that supports our local industry and go export industries.
(03:08):
And that's the key challenge. And at the moment what's
lacking perhaps a bit of certainty the settings are clear,
so that people can invest for the long term wherever
you are in the value chain. If you're upstream doing
expirations and drilling for gas, or if you're downstream like ourselves,
there's some certainty in the setting, so we can invest
with some confidence over time.
Speaker 1 (03:28):
Now I'm looking at the Rabobank August Agribusiness monthly and
on the farm inputs section where they have the commodity outlooks,
they're saying fertilizer prices continue to track or continue to
track higher in July, with your Rea leading the way
plus twelve percent month on month. I take it that
that number is only going to head in one direction
(03:49):
from here on.
Speaker 2 (03:49):
In Well, it's a bit hard to read. I think
we're probably approaching what we would say is the top
end of price at the moment, and all that that
increases driven by a lot of strong demand out there
and there and elsewhere, and restricted import to restricted exports
from China, and certainly it is a bit top here
today across all of the fertilizer products. However, you know,
(04:11):
we are a very small player at the end of
the end of the planet, and just we'll have to
see how those global dynamics play out. The positive thing
is from our perspective, there's the real confidence in New
Zealand ag The underline business is strong, strong autumn, looking
for a great spring. Disappointing disappointment as we do have
this New Zealand gas issue and the companion the team
(04:34):
to work with there. But outside of that, you know,
the business and Farmerland's looking great.
Speaker 1 (04:38):
Yeah, indeed, and the overall tenor of the agribusiness monthly
from Rabobank is very positive. Could we ever get to
the stage where we could make one hundred percent of
our UREA in this country? It's it's not probable.
Speaker 2 (04:51):
Is it probably something we wouldn't look towards and you
really need a really cheap energy sourcing and gas at
the moment. Longer term you can see renewable energy in
New Zealand and full electrification of a u EAR process
and the technology and the cost comes towards us and
that would probably be a New Zealand inkplay. So that
(05:12):
will require power company, energy company and potentially looking at
the they'd say at eighty to one hundred percent of
New Zealand's requirements. That's a long term play. The challenge
of course for now is we need to get to
the future, so we need to survive the short term.
Having said all that, we know we've covered any potential
shortfall from Caperni through imports. We've got boats on the water,
(05:34):
we've got alternative sources of nisien, so you know self,
I'd ever known here a dimonium phosphate here as well
to cover any potential shortfall, So confident that we'll have
product available for our farmer suppliers. It's just a longer
term solution for New Zealand. How much resilience do we
want locally and how do we have an energy sector
that supports New Zealand acuy business to the world.
Speaker 1 (05:56):
Yeah, okay, And if people are wondering why this is
such an important I was reading in your press release, Calvin,
that forty one percent of our ag exports are enabled
by Balance fertilizer. Obviously another forty percent probably by Ravenstown.
And I'm not sure what the splitters these days in
market share with the other fertilizer companies around the place.
(06:18):
But it's very important that we have the ability to
maximize pasture growth and take advantage of these really good
dairy and red meat prices at the moment.
Speaker 2 (06:30):
Absolutely, nutrients in quality, exports out. That's the focus. I
mean those nutrients in the soil, grow the pasture, growth crops,
feed the export am out, So that important thing is
lost on anyone. As challenges, of course, how we get
that good mix of local manufacturer and imports to deliver
(06:51):
cost effective nutrients to heare through our farmers and growth.
Speaker 1 (06:54):
Okay, Calvin welcome, Chief executive of Balance Agra Nutrients. Good
to catch up again.
Speaker 2 (06:58):
Nice to talk to you, Jamie thinks
But let's kick it off with the Chief executive of
Balance Aggrenutrients, Calvin Wickham. Calvin, Gee, how many years ago
was it that you and I were chatting when you
were the I think the chief executive of Global Ingredients
or the boss of Global Ingredients for Fonterra A while ago.
Speaker 2 (00:17):
Good afternoon, Jamie. Yes, it was a while ago, probably
five or seven years back before I moved to Amsterdam
with Fonterra. Then coming back into the Balance role about
two years ago.
Speaker 1 (00:26):
Now, well you're the big dog, you're the top dog there.
I mentioned that the Capuna Urea Planters has been a
bit of a jewel in the in the Balance Agrinutrients
Fertilizer Crown because am I right in saying it's the
only place in New Zealand where we make your rear and.
Speaker 2 (00:45):
That is correct? So it provides about one third of
are you rare for New Zealand than two thirds to
be imported between ourselves and other players in the market.
So yeah, it's been certainly a key part of the
New Zealand scene to have some resilience locally and as
you know, definitely need night gen available for spring to
boost that past your growth and crop growth. We wouldn't
(01:05):
just want to be totally beholden on global supply chains
for our night gen.
Speaker 1 (01:10):
So are you going to have to mothball the plant?
Speaker 2 (01:12):
Certainly that's not the intense Jamie, and we've been talking
at the moment about a short term shut to help
us bridge the gap. We're looking some short term gas
supply as we look to find that probably the pretty
horrible price, but that does keep us going. And the
reason we're trying to bridge the gap is that the
market is very dynamic at the moment. There is some
talk about potential new supply coming on, there's potential other
(01:36):
demand side players may not be able to stay and last.
So if we can see our line of sight to
a year, there's opportunity potentially for us to find some
gas at affordable price. Because clearly we have to produce
you rere a international price. There have to be competitive
against those.
Speaker 1 (01:52):
Inputs obviously, but are you going to be able to
find gas at an affordable price? As I said, industrial
users are now facing fifteen to thirty percent increase in
gas prices, and.
Speaker 2 (02:04):
In some cases a lot more than that, So that
is a challenge at the moment I think it's perhaps
a bit distorted, and we would think that in the
maybe in a year's time it might look different. We
have to wait and see. And also it's not a
uniform price across the year. Certainly really peak high pricing
across window because the need for thermal generation for electricity,
(02:26):
but I can fall back to very low marginal cost
at other times of the year. So perhaps that's one
of the opportunities for us is how do we perhaps
instead of make a full year make do we make
on a seasonal basis and then supplement with imputs like
we do now.
Speaker 1 (02:40):
Do you praise the Lord for Shane Jones.
Speaker 2 (02:45):
Shane's got some good strong views out there, but I
suppose I can say it's great to see people looking
to take initiatives and looking to take some action, and
we applaud this government and any future government. So we
can look to find some solutions to what's really a
New Zealand energy issue here. How do we have reliable,
affordable energy that supports our local industry and go export industries.
(03:08):
And that's the key challenge. And at the moment what's
lacking perhaps a bit of certainty the settings are clear,
so that people can invest for the long term wherever
you are in the value chain. If you're upstream doing
expirations and drilling for gas, or if you're downstream like ourselves,
there's some certainty in the setting, so we can invest
with some confidence over time.
Speaker 1 (03:28):
Now I'm looking at the Rabobank August Agribusiness monthly and
on the farm inputs section where they have the commodity outlooks,
they're saying fertilizer prices continue to track or continue to
track higher in July, with your Rea leading the way
plus twelve percent month on month. I take it that
that number is only going to head in one direction
(03:49):
from here on.
Speaker 2 (03:49):
In Well, it's a bit hard to read. I think
we're probably approaching what we would say is the top
end of price at the moment, and all that that
increases driven by a lot of strong demand out there
and there and elsewhere, and restricted import to restricted exports
from China, and certainly it is a bit top here
today across all of the fertilizer products. However, you know,
(04:11):
we are a very small player at the end of
the end of the planet, and just we'll have to
see how those global dynamics play out. The positive thing
is from our perspective, there's the real confidence in New
Zealand ag The underline business is strong, strong autumn, looking
for a great spring. Disappointing disappointment as we do have
this New Zealand gas issue and the companion the team
(04:34):
to work with there. But outside of that, you know,
the business and Farmerland's looking great.
Speaker 1 (04:38):
Yeah, indeed, and the overall tenor of the agribusiness monthly
from Rabobank is very positive. Could we ever get to
the stage where we could make one hundred percent of
our UREA in this country? It's it's not probable.
Speaker 2 (04:51):
Is it probably something we wouldn't look towards and you
really need a really cheap energy sourcing and gas at
the moment. Longer term you can see renewable energy in
New Zealand and full electrification of a u EAR process
and the technology and the cost comes towards us and
that would probably be a New Zealand inkplay. So that
(05:12):
will require power company, energy company and potentially looking at
the they'd say at eighty to one hundred percent of
New Zealand's requirements. That's a long term play. The challenge
of course for now is we need to get to
the future, so we need to survive the short term.
Having said all that, we know we've covered any potential
shortfall from Caperni through imports. We've got boats on the water,
(05:34):
we've got alternative sources of nisien, so you know self,
I'd ever known here a dimonium phosphate here as well
to cover any potential shortfall, So confident that we'll have
product available for our farmer suppliers. It's just a longer
term solution for New Zealand. How much resilience do we
want locally and how do we have an energy sector
that supports New Zealand acuy business to the world.
Speaker 1 (05:56):
Yeah, okay, And if people are wondering why this is
such an important I was reading in your press release, Calvin,
that forty one percent of our ag exports are enabled
by Balance fertilizer. Obviously another forty percent probably by Ravenstown.
And I'm not sure what the splitters these days in
market share with the other fertilizer companies around the place.
(06:18):
But it's very important that we have the ability to
maximize pasture growth and take advantage of these really good
dairy and red meat prices at the moment.
Speaker 2 (06:30):
Absolutely, nutrients in quality, exports out. That's the focus. I
mean those nutrients in the soil, grow the pasture, growth crops,
feed the export am out, So that important thing is
lost on anyone. As challenges, of course, how we get
that good mix of local manufacturer and imports to deliver
(06:51):
cost effective nutrients to heare through our farmers and growth.
Speaker 1 (06:54):
Okay, Calvin welcome, Chief executive of Balance Agra Nutrients. Good
to catch up again.
Speaker 2 (06:58):
Nice to talk to you, Jamie thinks
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