Bottom fell out of recycling enterprise

The Taha fertiliser factory at Awarua, south of Invercargill. Photo: Allison Beckham.
The Taha fertiliser factory at Awarua, south of Invercargill. Photo: Allison Beckham.
How did it all go so wrong so quickly?

That is the question Bahrain businessman Frank Pollmann is asking after the New Zealand arm of his international aluminium recycling business went belly-up last week.

Frank Pollmann.
Frank Pollmann.
Taha had a five-year contract with smelter owners New Zealand Aluminium Smelters (NZAS) which ran out on August 1.

Mr Pollman said he had every expectation it would be renewed, right up until the middle of the previous week.

When price negotiations failed and the contract ended, he said, he had no option but to request liquidation.

"It was an absolute blow to us, and especially hard on our employees. But we had no choice. We were in a catastrophic situation. We had no aluminium to process and no business."

Immediately, the $7million recycling plant next to the Tiwai Point aluminium smelter opened to great positivity in 2011 was mothballed.

A brand new $1million fertiliser factory at Awarua, south of Invercargill, and another fertiliser factory near Mosgiel are also in the process of closing.

They are owned by a Taha offshoot company, Taha Fertilizer Industries Ltd, but Mr Pollmann says because there is no material for them to process they will fold.

About 30 staff are or will soon be out of work, although NZAS has taken on most of the 21 Tiwai-based workers pending the arrival of a new recycling contractor.

Taha had $10,687.78c in the bank and had placed a further $3000 in a trust account to be paid to the liquidators.

Seven secured creditors were owed $1.49million and there were more than 60 other creditors as well owed an unknown amount.

Mr Pollmann, a German who had lived in Bahrain for more than 20 years, had built up a successful business after developing and patenting an improved method of recycling aluminium dross from the smelting process.

Processing the aluminium as close to a smelter as possible while the dross was still hot enabled 90% of the aluminium to be extracted and sent back for reprocessing, he said.

The remaining mineral-rich residue could then be further processed into mineral fertiliser, used in concrete, or used to make aluminium trihydrate, a product traded internationally and mainly used as a flame retardant and smoke suppressor.

He has the recycling contract at Aluminium Bahrain BSC’s smelter in Askar, Bahrain. Among the top 10 largest aluminium producers in the world, it is set in a 10ha oasis featuring an artificial lake supporting more than 7600 trees and shrubs and a fruit and vegetable garden.

It produces about one million metric tonnes of aluminium annually — about three times more than Tiwai — and is currently being expanded to produce a further 500,000 metric tonnes annually.

About eight years ago, Mr Pollmann decided to expand into New Zealand and began negotiations which resulted in construction of the recycling plant at Tiwai.

He says he was dedicated to sustainability, supporting the local economy, and the ‘‘reduce, recycle reuse’’ mantra.

He had it all worked out.

He would store the Tiwai residue, which he branded as Ouvea Premix, build a fertiliser factory, and begin selling the end product.

But things began to go wrong a couple of years ago.

The factory had not materialised — although a small trial factory in the Invercargill central city industrial area was successful — and the premix needed to be stored.

The premix is classed as a hazardous material.

If it becomes wet it can give off highly corrosive ammonia gas known to be a serious health and safety risk.

Mr Pollman said he was unaware until later his then New Zealand manager Mark Egginton was breaking the rules and storing the premix without consent in Edendale, Bluff and Mataura.

Egginton and Taha were prosecuted last year and Taha had to go through a retrospective resource consent hearing for Mataura.

It was granted with the condition a $2.3million bond be paid in case the premix had to be moved or the site cleaned up.

Taha appealed and that matter was still under negotiation at liquidation.

Mr Pollman said Mr Egginton was "reckless" and his actions resulted in Taha gaining a reputation which was impossible to shake.

"We were portrayed as environment pirates when that was exactly what we were not. Our philosophy is to take a hazardous material and turn it into something good."

It cost Taha more than $1million to clean up the Edendale storage site.

"But we did that because it was the right thing to do."

The liquidators’ report said about 24,000 tonnes of premix was being stored at several sites in Southland, including about 10,000 tonnes in part of the old Mataura paper mill.

What happens to that is the liquidators’ responsibility now.

However, Mr Pollmann did not believe the storage problems and bad publicity contributed to NZAS pulling the pin.

Rather, it hinged on economics.

NZAS kept asking Taha to reduce its price to recycle to the point where Taha would have lost money, he said.

"That’s when we knew we wouldn’t have a contract."

While what NZAS did was legal, "it’s not the way I would do it", he said.

In a statement last week, NZAS general manager Gretta Stephens said NZAS was in the process of appointing another contractor.

Mr Pollmann said he did not know who that provider would be or how they might recycle any more efficiently or cost-effectively than Taha.

Before Taha’s arrival, NZAS was sending aluminium dross to Australia for recycling, something Mr Pollman said would not be economic now because of shipping costs.

Aside from the financial losses, Mr Pollmann said he was devastated his New Zealand recycling deam had come to an abrupt end.

"What hurts the most is we were so close to  ...  making it all work. Now it’s all come to a screeching halt."

allison.beckham@odt.co.nz

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