N.Z. steel production below target, loss doubled

Press, Volume CXI, Issue 32568, 30 March 1971, Page 20

N.Z. steel production below target, loss doubled

(New Zealand Press Association)

AUCKLAND, March 29. The iron-making plant at New Zealand Steel, Ltd, is still a considerable way from target levels of production but “reasonable progress” has been made in the steel-making plant, according to the chairman (Sir Woolf Fisher).

In .spite of a sales increase from $14.2m to s2om for the year to March, the company is expected to record double the loss of $2.9m incurred in the 1969-70 year. “The indicated results for the present -financial year mean that the company’s establishment phasas are providing more prottracted and more costly than was earlier expected or was forecast at our last annual meeting,” Sir Woolf Fisher said. “Towards the end of the 1971-72 financial year, the company should achieve a profitable level of operation,” he said. Improvement will come steadily, he said, as the pipe mill and the Tahor ironsands

project add their contribution to the galvanising, ironmaking and steel making plants. This will bring nearer the time when the company can consider dividend payments, he said. For the financial year now nearing its end, the company's loss is expected to be “of the order of twice the 1969-70 figure after providing straight-line depreciation of at least $2.5m.” The 1969-70 loss was $2.9m after straight-line depreciation of sl.sm.

i “We continue to have pro- ! blems with equipment. These r have related both to the peli letising plant and to the rei duction kiln and its ancillary equipment,” Sir Woolf Fisher ■ said. The target levels of pro- • duction for both the iron and ' steel plants are round 100,000 • tons a year—total steel pro- ‘ duction in the six months to I the end of September, 1970, ’ was 24,840 tons, and for the next six months to March 21, i 1971, production was 28,222 i tons, making a total of 53,062 i tons. ' On an annual basis the recent rate of steel production i “approaches the company’s i current market demand.” During February the iron

plant was run on imported Australian pellets, freeing the company’s own pelletising plant for alterations. These alterations have now improved ironmaking performance. But further modifications to the ironmaking plant itself will be necessary to bring it up its guaranteed rate of output. These are being discussed with the manu-

facturers and the company’s engineering consultants. The galvanising plant had attained its target output since June, 1969, and continues to operate smoothly and profitably. tn the second half of the financial year production was 35,826 tons compared with 35,732 tons in the corresponding period of the previous financial year. This makes a total of 74,365 tons compared with 74,167 tons in the previous year. The company’s range of galvanised products is being expanded, and efforts are being made, with some success, to widen export markets.

Issue closed, filled Association Group Securities, Ltd, has closed its latest debenture and note issue oversubscribed. The company sought a total of $3.5m. Interest rates were increased in the issue, with the top rate up to 8| per cent for 12 years.