Rock solid business for sale in Hawkes Bay

12:46 PM Sunday May 25, 2014 Colin Taylor

The quarry has been estimated to contain between five and seven million tonnes of lime.

Brown's Lime Quarry near Dannevirke, a 13.7 hectare open cast lime-producing business which has been operating since 1994, is featured for sale as a going concern business and freehold property in Bayleys' latest Total Property magazine.

The fully consented quarry and crushing/drying plant is being marketed by Glyn Rees-Jones of Bayleys Napier through a tender process closing on June 19.

"New Zealand farmers have become more conscious about their environmental practices and this has spurred the owners of one of the North Island's biggest lime quarries to place their plant on the market," Rees-Jones says.

"With dairy and meat production continuing to increase from growing exports, and farms ramping up their stock and pasture management procedures to keep pace with demand, quarry owners Richard and Marie Brown have decided now is the optimum opportunity to take advantage of market conditions and sell up and retire."

The quarry, which services both dairying and sheep and beef farms in the Hawke's Bay, Wairarapa, Manawatu, Rangitikei and Wanganui regions, has been estimated by mining analyst company Arcadia Resources Ltd, to contain between five and seven million tonnes of lime.

"The highest annual production from the quarry in the past 20 years has been 35,000 tonnes, so there is still plenty of rock that is prime for excavation and crushing," Rees-Jones says.

"It's unlikely this quarry will run out of lime as the existing face and cuttings are surrounded by billions of tonnes of high grade lime.

"The plant has been run as a small owner/operator business employing the owner and two other full time personnel. With existing open cast excavation infrastructure and faces in place, and room for the addition of more plant and machinery, there is considerable potential to bolster output levels."

Rees-Jones says the undulating hillside land immediately surrounding the quarry is leased to a sheep and beef farmer and the quarry will be sold with a clear title.

He says Brown's Lime Quarry has a distinct market advantage in being the only lime producing quarry in the North Island which uses a drying plant in the processing.This makes its lime the most even-spreading and free flowing lime on the market.

"The hourly production rate utilising current plant is up to 70 tonnes per hour. Earnings before interest and tax [EBIT] at the quarry grew substantially over the intervening years between 2009 and 2012. However, the Browns see now as a good time to move on while still leaving growth potential in the business for a new owner.

"The quarry is surrounded by sheep and beef land, with no nearby residential dwellings so any move to increase production output would have minimal environmental impact." Buildings within the quarry comprise a 1440sq m steel shed that houses the crusher, conveyer and dryer unit; and provides cover for the uncrushed lime and machinery storage. Two smaller sheds and three lockable containers which are included in the offering are individually used as an office, small workshop and general storeroom.

Plant and machinery assets being sold in association with the quarry include a Cat digger, a loader, dump truck, two crushers, a lime dryer, screening unit, and various tools and spare mechanical parts.

Browns Lime Quarry is certified under the Fertiliser Quality Council's Fertmark quality control programme for producing high quality agricultural lime, di-calcic phosphate and dairy race rock used for dairy walkways.

Rees-Jones says lime is the most common soil preparation used in New Zealand and is applied primarily to neutralise acidification in the soil.

"Acidification occurs in all farmed soils -- caused by normal biological processes, such as nitrogen fixation, nitrate leaching and photosynthesis. The more intensively land is farmed the greater the rate of acidification and process is also accelerated by higher rainfall causing increased leaching.

"Soil micro-organisms prefer alkaline conditions with clover growth more likely to be limited in dry soil conditions where pH is low. As the pH level in soil increases up to a more neutral rating of six, growing conditions become more favourable for micro-organisms and they mineralise more of the nitrogen in the organic farm matter. This can sometimes show up as a greening of the pasture after lime is applied.

"Use of lime can also improve the absorption of rainfall into soil. This can be particularly important on dry hill country with the rain absorbing into the soil faster rather than running off the surface," Rees-Jones says.

"With numerous drought and near-drought scenarios impacting on Lower North Island regions over the past decade, water retention in soil has become ever more critical for farmers, and is one of the reasons why Brown's Lime Quarry has prospered."