Future of Hillside Workshops Resolved

15th November, 2012

Future of Hillside Workshops Resolved

The future of Hillside Workshops in Dunedin has been resolved after an extensive national and international search was undertaken for potential purchasers for the site. Unfortunately that process did not result in any purchaser for the entire Hillside business.

KiwiRail has entered into a conditional agreement to sell the Foundry to Bradken who will continue to operate the site, including supplying parts to KiwiRail as required. The sale is expected to be completed early next year.

KiwiRail’s freight business will now operate the heavy lift facility and the rest of the site will be progressively closed down over the next few months as work is either completed or transferred to the Hutt Workshops near Wellington.

According to Chief Executive, Jim Quinn, while it was unfortunate the company couldn’t finalise a purchaser for the whole business, he was pleased there will still be some operations continuing at the site.

“Despite a rigorous sales campaign there simply wasn’t a buyer out there for the whole operation,” he said.

“As one of only a few foundry operations in New Zealand, Bradken could see the potential for this part of Hillside and we will be contracting some work to them as required. But, as an international engineering enterprise, they will also be able to access a larger business market with more product scope than the foundry’s largely ‘rail only’ focus.”

The decision to sell Hillside was made following a thorough analysis of both the current work and future prospects for the Workshops which concluded there is not enough work to cover the costs to run the site, particularly when the existing rail capital projects end.

“KiwiRail alone could not afford the future operating costs to keep Hillside open in the face of this decreasing work,” he said.

“Hillside has made an important contribution to the development of rail in New Zealand since 1875 and this won’t be forgotten. Many will be sad about its closure, however change is necessary as we continue to build a sustainable rail business for the challenges ahead.”

“This will be very difficult for our staff and although some will be transferred to Bradken or the KiwiRail Freight business, there will be redundancies,” said Mr Quinn.

“We will be working closely with the Hillside team and their representatives as we progress to the next stage and start to wind down operations.”

Locomotive, engine, bogie and wheel refurbishment capability will continue to be provided to KiwiRail by the Hutt Workshops.

Further Background

The Hillside site, in South Dunedin, covers 7.2 hectares with 3.1 hectares of covered workshops and buildings. There are currently 115 staff working at Hillside. At this stage Foundry staff will be offered employment by Bradken, some will continue to work for KiwiRail Freight in the heavy lift area, and there will be redeployment opportunities to Hutt Workshop in Wellington.

The site was advertised nationally and internationally for sale from April to June 2012 and a number of expressions of interest were received. The sale process took longer than initially anticipated as we worked hard with the parties who had expressed an interest in purchasing the entire operations. Unfortunately after an extensive sale process we could not source a buyer for the entire Hillside business.

Bradken

Bradken employs over 6,000 people and is a global designer, manufacturer and supplier of differentiated capital and consumable products to the mining and construction, rail and transit, energy and general industrial markets. The company’s global footprint includes 34 manufacturing facilities throughout Australia, New Zealand, the United Kingdom, China, the United States of America, Canada, Malaysia and Indonesia supported by a global network of sales and service facilities. The driving force behind the company is a commitment to innovation and continuous improvement. Bradken’s aim is to provide all customers with value through the creation of specialised product solutions.

Bradken’s Dunedin foundry employs 50 people and supplies high quality iron and steel castings to a range of New Zealand and overseas based general industrial and mining customers.

ENDS

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