Quarry earns council $717k profit
BUCKING the industry trend the Lismore City Council-owned Northern Rivers Quarry and Asphalt has reversed last year’s large loss to ann- ounce a projected profit of $716,800 for this financial year.
The council’s commercial services manager, Phil Klepzig, said the turnaround from a $662,500 loss last year was the result of a reorganisation of the business which led to reduced costs and higher selling prices.
“One of the things we’ve taken on board (after last year’s loss) was to attack our cost of production and review our activities to try and cut costs wherever we could,” he said yesterday.
On top of the $716,800 profit, the quarry has paid a dividend to council of just under $400,000 to date and provided road and construction material to the council at a 23 per cent discount.
“Last year was the worst year we’ve had by far,” Mr Klepzig said.
“It was a combination of factors – a loss of workload and two really wet years in a row that impacted severely on what we could produce, and our rates of production, which drives up costs.”
Mr Klepzig said that with the changes, and a repeat of extremely wet conditions, quarry operations would not be affected to the same extent.
The quarry industry has been hit by the financial crisis with a dramatic drop in demand from the housing and construction sectors.
Building materials giant Boral recently announced a 42 per cent fall in profits, while major rival Fletcher recorded a slightly smaller 33pc decline.
Mr Klepzig said management realised the quarry was in difficulty in March last year and started to develop plans to make it more efficient.
Part of that was appointing new quarry manager Murray Punshon, who has years of industry experience and who instigated a series of changes to operations and work practices and renegotiated contracts with suppliers.
“We also realised that we had to train our people to use the machines more efficiently to improve productivity,” Mr Klepzig said.