Cement company Holcim has announced plans to shut its cement manufacturing plant in Westport with the loss of 120 jobs and shelve plans for a plant near Oamaru.
The international cement producer announced on Thursday that it would close its Westport plant in two to three years and cease making cement in New Zealand.
Holcim's plans for a $500 million plant at Weston, near Oamaru, have been put on hold indefinitely.
The company would instead spend $100 million over the next three years building a terminal to import and distribute bulk cement throughout New Zealand near a major port which has yet to be determined.
Managing director Jeremy Smith said once the terminal is operational, cement imported through the facility will replace local production at the Westport plant.
Mr Smith said there is a significant lead time before the eventual job losses and the company is working with staff on how this will be handled.
The Westport plant produces about 500,000 tonnes of cement a year, while the new terminal will have the capacity to hold 1 million tonnes of imported cement.
The Waitaki District Council said it is very disappointed that plans to build a new factory near Oamaru are on hold. Chief executive Michael Ross said the decision is a serious blow after the company and council did a lot of work to secure resource consents.
"It's really disappointing that all that work would appear not to be coming to fruition, and for us it's a major opportunity lost."
Mr Ross said opponents of the plant would be delighted, but hundreds of potential jobs now won't happen.
Buller District mayor Pat McManus said the council will lose income when the Westport plant closes.
"There's two ships that operate out of our port. It helps keep our port open and our river dredged. It costs our council roughly $1 million a year just to dredge the river and that cost is fully met by the exports of cement and a few fishing boats. Well, after three years we won't have an export user going out of the harbour."
Mr McManus said the loss emphasises the need for the Government to allow more coal mining permits in the region.