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Speaker 1: One of the biggest names in New Zealand agriculture, Balance

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Speaker 1: is going to close its factory for four months because

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Speaker 1: of the price of gas. Balance produces one third of

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Speaker 1: New Zealand's nitrogen fertilizer. Its current gas contract runs out

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Speaker 1: in September and it hasn't secured a new deal yet.

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Speaker 1: Calvin Wickham is the CEO at Balance.

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Speaker 2: Hae, Calvin, Hi, how are you going?

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Speaker 1: I'm well, thank you mate. Listen. Can you not get

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Speaker 1: a deal at all? Or can you just not get

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Speaker 1: a good deal now?

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Speaker 2: We just couldn't get a deal at affordable price that

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Speaker 2: we could make work.

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Speaker 1: How much more were they charging you than what is affordable?

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Speaker 2: We're within charges because we actually never got to reach

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Speaker 2: an agreement. But the bigger issue probably now is there's

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Speaker 2: just no supply available to gas is gone elsewhere, So.

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Speaker 1: Even if you wanted to take a deal, you cannot

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Speaker 1: because there is none.

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Speaker 2: There's no supply that we can secure for long term basis.

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Speaker 2: Today we are hunting for short term gas and if

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Speaker 2: we can find some short term gas, we'll use that.

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Speaker 2: But if we can't then we'll be forced into a

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Speaker 2: short tam shut.

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Speaker 1: Yeah, give me an idea of what we're talking about

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Speaker 1: here in terms of what you were paying and what

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Speaker 1: you are looking at having to potentially pay now if

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Speaker 1: you do get gas.

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Speaker 2: I suppose it's pretty commercially sensed this. But you can

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Speaker 2: see the gas prices in the market have gone up

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Speaker 2: considerably for all players, and our challenge is we can't

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Speaker 2: pass those on easily. We have to meet an international

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Speaker 2: input price powering.

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Speaker 1: Okay, what happens after four months?

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Speaker 2: So say we go from short term gas to take

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Speaker 2: us for a period, we go for a short term

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Speaker 2: shut we need to have a long term supply agreement

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Speaker 2: in place at the end of that to give us

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Speaker 2: some certainty to start up basically.

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Speaker 1: And what if you can't, then we'll be forced.

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Speaker 2: To either make a decision, are we going to wait

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Speaker 2: longer because we can see a line of sight to

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Speaker 2: some gas, or otherwise we've forced them to potentially permanent

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Speaker 2: shut down or at least a moth pull and the

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Speaker 2: plant for a period. That was not on the cards

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Speaker 2: at the moment, but we have to.

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Speaker 1: We have to, Yeah, how high are the chances of

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Speaker 1: that happening.

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Speaker 2: That's a difficult one to say. We think we can

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Speaker 2: get to see a line of sight to get through

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Speaker 2: the next year, and they make a decision, and the

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Speaker 2: market is so dynamic at the moment, it's hard to

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Speaker 2: know what the supply all the demand side is going

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Speaker 2: to look like in twelve months from today.

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Speaker 1: Okay, if you shut down in New Zealand, where do

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Speaker 1: you go?

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Speaker 2: We have to import fully, So at the moment we

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Speaker 2: produce one third of New Zealand's nights JUNI rear. We

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Speaker 2: can import the balance. But then New Zealand newses all

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Speaker 2: that resilience in local manufacturer for our for our agriculture industry.

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Speaker 1: You can't replace gas with anything else.

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Speaker 2: No, you need gas. It's the energy source and the

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Speaker 2: feedstot sort the way you rear is produced today. Yeah,

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Speaker 2: long term you can do full of entrification, but that's

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Speaker 2: that's sort of a ten year play. A lot of

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Speaker 2: experience and near a whole lot more renewable energy at

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Speaker 2: the front end as well.

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Speaker 1: Tell them we can't go on like this as an economy.

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Speaker 1: What do we do?

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Speaker 2: Yeah, that's one big challenge for New Zealands is if

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Speaker 2: we want to support our local manufacturing and our export industry,

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Speaker 2: we're going to need reliable, affordable energy. So yeah, we're

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Speaker 2: welcome to how we can encourage solutions and get some

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Speaker 2: systems in place to build that resilience.

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Speaker 1: Yeah, as you say, some things are commercially sensitive, but

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Speaker 1: what does what does four months mean in terms of

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Speaker 1: lost lost income for you guys, lost jobs.

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Speaker 2: We're going to keep all the people on for that

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Speaker 2: four month period and that's the balance here, keeping the

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Speaker 2: staff and gaze being able to afford for that period

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Speaker 2: and then to look for a long term gas. Much

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Speaker 2: longer than that, it starts to become financially pretty straining

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Speaker 2: for us.

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Speaker 1: All right, Kelvin, thanks very much. Kelvin Wickham, CEO of

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Speaker 1: Balance Agri Nutrients. For more from Heather Duplessy, Allen Drive,

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Speaker 1: listen live to news talks. It'd be from four pm weekdays,

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