Solid Energy cutbacks revealed

By Lee Scanlon of the Westport News

Solid Energy went into voluntary administration last year. Photo / File
Solid Energy went into voluntary administration last year. Photo / File

The extent of Solid Energy's cutbacks is revealed in the company's evidence to Parliament's commerce select committee.

Solid Energy went into voluntary administration last year and is selling down its assets. Its select committee evidence shows the company made 210 staff redundant in 2014/15, including 151 at Stockton mine, six at Spring Creek Mine and 15 at head office.

The redundancies cost $5 million (2014: $8.2m) and restructuring cost another $4.4m (2014: $8m), Solid Energy told the committee.

The highest severance package was $160,000 - $169,000. Severance packages of between $10,000 and $30,000 went to 169 staff.

Solid Energy employed 576 people nationwide (801 including contractors), 287 fewer than in 2014.

At its peak in 2012, Solid Energy employed 1658.West Coast employee numbers plummeted from 1007 in 2012 to 356 last year.

Christchurch head office jobs fell from 230 to 52 over the same period.

Solid Energy reduced its operating costs by $100m to $400m last year. Personnel costs fell by $15.7m and contractor costs fell by $51m.

Capital spending fell from $12m to $8.5m. In 2012, Solid Energy's capital spending totalled $164m.

Solid Energy sold a number of its assets last financial year, including 34ha of land and two houses in Buller and portacoms and light vehicles from Stockton Mine.

The company relocated from its palatial Christchurch head office to smaller, cheaper premises at Addington.

Its head office costs have decreased by almost two-thirds, to about $330,000 this financial year.Solid Energy's light vehicle fleet - cars and utilities capable of road use - totalled 214 compared to 360 in 2012 and was being further reduced, the company said.

It bought nine vehicles, all for Stockton Mine, last financial year, at a cost of $336,000.Solid Energy managers received gifts valued at $1259 from suppliers or business partners during the year.

The most expensive were tickets to rugby games, costing $200 for two, given by Gen-i, Spark, Revera and Goughs. Solid Energy gave no gifts to external organisations or individuals.

The company spent $10,919 on catering, half as much as the previous year. Domestic travel cost $700,895, compared to $4.1m when the company was at its peak in 2012. International travel cost $302,755 compared to $1.8m in 2012.

No staff had Koru Club memberships, compared to 22 in 2012.The company cut its membership fees to various organisations by $108,057 to $857,707.

Its $91,304 membership fee of the Coal Association was waived as it paid $100,000 for membership of Straterra.

It saved another $16,753 by cancelling its membership of Business NZ ($12,500), MINEX Health and Safety Council ($1850) and the Major Electricity Users Group ($2403).

Its Mines Rescue levy increased from $510,539 to $752,055 and it retained its memberships of Minerals West Coast ($5000) and India New Zealand Business Council ($652).

The cost of PR material, advertising and statutory publications plummeted from $336,305 in 2012 to $8500 last year when there were no PR campaigns.

Solid Energy now employs only one PR/communications employee compared to nine in 2011/12.

The company's highest earner, understood to be chief executive Dan Clifford, received a salary of $650,000-$659,999 - about half as much as Don Elder who headed the expansion plan which contributed to Solid Energy's downfall.

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf03 at 27 Feb 2017 08:48:02 Processing Time: 297ms