Viyella Deal May Affect Wool Industry

Press, Volume CX, Issue 32214, 5 February 1970, Page 15

Viyella Deal May Affect Wool Industry

The Imperial Chemical Industries, Ltd, takeover bid for Viyella, announced recently, has generated a spasm of conjecture about the future shape of the British fibre and textile industries, the New Zea-1 land Wool Board says ini its latest newsletter.

Since 1961, when Courtaulds beat off an earlier 1.C.1. take-over, there have been two giant British fibre manufacturers—l.C.l. and Courtaulds—with Viyella a smaller but rapidly growing company. Courtaulds’ strategy lias been to concentrate mainly on the production of cellulosics (rayon), although it is now producing true synthetic fibre (acrylics such as Courtelle) and to buy into the textile manufacturing in-

idustry to assure market outlets for its fibre. : 1.C.1., while having many shareholdings in textile companies, has stood aside from [ the direct take-over. 1.C.1. produces only synthetic fibre, i mainly nylon and terylene, itself. But the removal of Mr Joe Hyman as chairman of Viyella has brought an immediate change in attitude on the part of 1.C.1., which is directly ignoring the British Government’s ban on further mergers among the large Lancashire companies. The Government has reacted to the bid by Viyella

by establishing a committee under Mr Harold Lever to consider the structure of the textile industry and the linking of textiles and fibres. Meanwhile 1.C.1. and Courtaulds are reported to be having talks about the future of the industry, and it is by no means impossible that the two companies will merge, or reach some form of truce in which they would combine forces in international markets.

The bid by 1.C.1. has had further repercussions, for it has forced foreign fibre companies operating in the United Kingdom to consider further vertical integration. Monsanto, the United States giant, has warned that it would have to look at the question of investment in British textile manufacturing to protect its fibre plants in Northern Ireland and Scotland, where nearly £42m is tied up in nylon and acrylic i production. i Du Pont and the German i company, Hoechst, are other ‘companies with fibre producing units in the United Kingdom. | Whatever the outcome in I the immediate future in Britlain, there is a world-wide I trend by fibre interests to follow Courtaulds’ philosophy of vertical integration, the Wool Board report says. In the long-run the acquisition of large sections of the textile industry by fibre interests could have ominous implications for natural fibres wool and cotton. LONDON j Australians were weak on the I London Stock Exchange on Tues-1 day after the Melbourne/Sydney | downtrend and the possibility' of share-dealings control in! Australia. Tasminex lost £3 5s at £7, while Eastmet, Great Boulder, North Kalgurli, Western Mining, Westralian, Newmetal and Kia Ora were among other issues to ease sharply. Samin reversed an early gain, while Poseidon lost an Initial rise to close unchanged. North Flinders was an isolated . firm spot against the' trend. Oils also declined. Tuesday's Sales Included. — Nth 8.H., 89s 4Jd; B.H. Sth. 47s 6d; 8.H.P., 1545; R.T.Z. ord., 132 s 43d, and regd. 131 s 103 d; Mt Lyell, 255; Nth Kalgurli. 86s 9d; Lake View, 25s 6d; Ampol. 10s 73d; West Min., 1375; Elder Smith, 19s 6d: N.M.A., 8s 9d; Dalgety 565; Lloyds Bank, 62s 9d; A.N.Z., 63s 9d; Nat. Bank, 27s 9d; N.S.W., 80s 3d; P and O, 52s 9d; Transp. Dev., 12s 4d; 8.M.C., Ils 6d; Distilllers, 235; War Loan 33 p.c., £4O 12s 6d. I.