Bremworth has made alternative arrangements for yarn supplies following the Cyclone Gabrielle flooding damage and shutdown of its Awatoto yarn spinning plant in Napier.
The future of the site is still unclear, as is the continued employment of more than 100 staff members who have been cleaning up, funded by business interruption insurance.
The listed carpet company has updated its partial insurance settlements to $35.5 million, plus GST where applicable.
Further insurance payments are expected after completion of assessments of damage to buildings, plant and equipment, and the loss of inventory and profit.
Awatoto will be offline for a yet-to-be-determined but significant amount of time, and perhaps permanently.
Bremworth said all insurance payments are being put towards implementation of mitigation and business continuity plans, supporting affected staff members and meeting ongoing commitments.
Significant quantities of yarn for carpet manufacturing are now being sourced overseas and trialled at the Whanganui and Papatoetoe plants.
An independent New Zealand yarn spinner is supplying approximately 10% of Bremworth’s needs and a further 25% of its needs are being supplied by a NZ yarn dyeing facility, both in Canterbury.
The remaining supply is now expected to come from overseas, Bremworth said.
“At the same time, the use of the independent third-party dyeing facilities to supply the Whanganui yarn spinning plant with dyed fibre has also gone much better than expected, with the Whanganui plant now able to produce both felted and woollen spun yarns – putting the company in an encouraging position.”
In April the company commented on the Awatoto damage and cleanup, two months after Gabrielle, which occurred on February 14.
The latest update was a further two months on, released to the sharemarket on June 28.
In April Bremworth chief executive Greg Smith said the detailed assessments included the flooded machinery, wool markets and the future of the Awatoto Industrial District and its contamination and future flood risk.
Before the cyclone Bremworth shares traded between 45c and 50c and since then they have twice fallen to low points of 30c before partially recovering to around 40c.
“Clean-up at the Napier site is virtually complete, with buildings, plant and equipment now in a steady state pending a decision on appropriate next steps,” the latest update said.
“The detailed assessment of damage to buildings, plant and equipment has been completed by an independent, multinational engineering consultancy, appointed by us.
“The results are currently in the process of being reviewed by the loss adjusters and their own experts.”
Meanwhile WoolWorks, the scouring company with an Awatoto site alongside Bremworth, said it remains on track to open a rebuilt and impressively re-equipped plant in November.
Chief executive Nigel Hales said state-of-the-art scouring machinery has been secured and the biggest challenge remaining is new electrical switchboards coming from overseas.
Operating out of two other plants since February, at Clive in Hawke’s Bay and Washdyke in the South Island, WoolWorks will finish this financial year having scoured 93 million kilograms.
This is more than was achieved in the covid-impacted 2021-22 financial year, Hales said.
Planning is also underway by a newly formed Awatoto Industrial Action Group of plant operators on flood protection for the future.
No issues with site contamination have been found since the faecal matter in silt deposits following the flood.