Fletcher Holdings’ Diversity Of Interests

Press, Volume C, Issue 29633, 2 October 1961, Page 16

Fletcher Holdings’ Diversity Of Interests

[By Our Commercial Editor] During the slump of the ’thirties a small builder travelled extensively throughout New Zealand trying to persuade politicians and local bodies to let contracts for him to build houses at £2OO each. It was the same builder who rushed his men to Napier after the earthquake to start building temporary premises for the trading banks, so that business could be resumed in the area. These anecdotes about Mr (now Sir James) Fletcher were told to journalists last week by one of his sons, Mr John S. Fletcher. They illustrate the faith in the future of New Zealand, which has always characterised the business decisions of Sir James Fletcher.

Today, 30 years later, I Fletcher Holdings, Ltd., con- ' trols an industrial empire , without parallel in New Zea- j land. In the face of renewed j doubts about the country’s ' short-term prospects, Fletcher j Holdings is confidently plan- < ning further expansion. < Some of these plans were ] unfolded at Penrose last j week, when executives of 1 the firm held a “meet-the- ] press week” at their head j office. Financial journalists ] from the country’s leading journals were invited to , Auckland for a day or more, ( shown the principal activities , of the company in that area, . and given the opportunity of ; discussing any aspect of them , with executives. Since the 1930’5, and more ■ particularly in the last 10, years, the emphasis in the . growth of the company has been on diversification. From the building of houses and offices, the group has extended into major contracting schemes, often in partnership with giant overseas organisations. From Timber to Steel The manufacture of plywood and veneers, mass production of doors, cold-rolled roofing and sheathing, timber milling, builders’ supplies—these are some of the activities now carried on by Fletcher Holdings’ subsidiaries at many places throughout the country. The recent acquisition of the New Zealand interests of Kauri Timber. Ltd., has extended the company’s milling and timber potential But development of this potential is bv no means the end of the Fletcher plans in this field, which include the establishment of an integrated timber and chinboard venture on the West Coast Fletcher Holdings’ proposals to the Government are described in a Press Association message ; printed elsewhere today. The experience of forestry

gained through its sawmilling operations perhaps tempted Fletcher Holdings into the field of ouL'p and paper making. Sir James Fletcher’s part in the establishment of Tasman Pulp and Paper, Ltd., is well known; Fletcher Holdings retains a holding of one million shares in this company. More recently, it has acquired a substantial interest in the old-established New Zealand Pape!.* Mills at Mataura, and is sponsoring plans for modernising and ex*' panding this business.

As builders and contractors, the Fletcher group has first-hand knowledge of the needs of the building industry; hence the success of such ventures as plywood and veneer manufacturer. Of recent years the group has become increasingly interested in metal fabrication and production. A product which is destined to become widely used in New Zealand is now being made at Penrose. Little known outside Auckland, it is net being “pushed" because local demand readily absorbs the present limited output. Known as "Brownbuilt,” it is a form of cold-rolled steel roofing and sheathing The process was developed by the E. T Brown Company, of Melbourne, which is associated with Fletcher Metal Sections. Ltd., in the Penrose venture. The raw material, imported in coilstrip form, is a special type of zinc-coated steel and the finished product is a footwide ridged strip, versatile and simple to use. Pacific Steel Perhaps the most ambitious of all the Fulcher projects now being developed is Pacific Steel, Ltd. Like Tasman Pulp and Papef, Pacific Steel is a partnership of New Zealand and English interests; Fletchers hold SfOXMO of the 1.850.000 shares.

Present plans for Pacific Steel are confined to the production of a limited range of steel products from scrap metal Initial production will comprise small "rounds”—as used in concrete reinforcing —and several of the smaller angled sections used wherever light girder work is required. The larger of the two buildings which house this project is 875 ft long (with roof and walls, incidentally, of Brownbuilt). A growing pile of metal scrap nearby will provide the raw material for this mill, a large one by any standards. "The only protection we seek for this project is an assurance of our raw material,” said Mr Fletcher, when asked whether the company; sought a tariff-for Pacific i Steel. To this* end, he said. 1 an embargo had been placed; on the export of scrap and Pacific Steel bought all the country’s scrap. The price, for scrap was fixed in rela- ; tion to world prices, and . varied according to changes ; in overseas prices. The capacity of the scrap ' mill is well in excess of New Zealand's annual supplies of scrap, and the mill is de-| ' signed so that capacity can ■be . even further increased. The mill will therefore, be , in a position to smelt iron ( ore from New Zealand , sources, if that day comes to ’ pass. > Fletcher executives are confident that it wiH. "We feel certain that a satisfaci tory process for processing . New Zealand ironsands ean 1 be solved,” said Mr K. G. Fraser, managing director of . Fletcher Group Services. 1 When that day comes Pacific ’ Steel will be ready to tackle • the new problems that int evitably accompany the pro- ■ cessing of a new raw materr ial. i Pattern for Future? This review of the current t activities and projects erf I Fletcher Holdings, though in--8 complete, gives some indicaS tion of the extent of the Fletf cher '"empire.” The group’s • interests are in basic indus--1 tries, and it holds a leading. • if not a dominant, position r in rnaiiy fields. • Large-scale production is ' the key to all Fletcher oper- . ations, and those of the partB nerships it has formed. If the scale of these operations sometimes has the character of a monopoly, that may be s the price which a small ecos norny has to pay for effici- , ency. Monopoly of local proa duction does not mean exd ploitation of the consumer. - provided the consumer has r the choice of the local proe duct or an imported substitute.