Rex Consol, plans joint ventures in Asia

Press, Volume CXI, Issue 32588, 23 April 1971, Page 16

Rex Consol, plans joint ventures in Asia

(New Zealand Press Association)

AUCKLAND, April 22.

At its third attempt at joint venture production in South-East Asia, Rex Consolidated, Ltd, is on the verge of succeeding, in Singapore. The chairman (Mr F. Bruell) said that previous attempts had been frustrated by unrest in the area.

The firm is also negotiating the manufacture under licence of conveyors in South Africa and a limited range of items in Australia. These developments in the company’s export policy were announced by the managing director (Mr F. Bruell) who has just returned from overseas.

The new company in Singapore will have a majority holding in Singapore hands and a capital of $NZ134,000. Rex Consolidated will supply plant, tooling, technical know-how and a balance of the finance.

Mr Bruell says negotiations are going on with the Singapore Government to obtain pioneer status for the venture. If this is granted, it will, give the company a five-year tax holiday. The aim, according to Mr Bruell, is to begin production on a small scale and almost immediately set up parallel production facilities in Malaysia. “This is necessary because of the tremendous duties between these two republics,” he says. The two fac-

I tones will interchange lingProduction from both factories will be for export to i the whole of South-East Asia and Africa. “To manufacture for the Singapore market only is economically unwise and unprofitable,” Mr Bruell emphasises. He says that expansion from stage one will depend on the state of various markets, particularly Taiwan, Hong Kong and Indonesia. At present Rex Consolidated exports to about 40 countries. Well over a third of its total export orders go to South-East Asia. The company has a rule that it will not consider a product for manufacture unless it has export potential. Mr Bruell says that geographical factors, labour content and the amount to sophistication necessary in production will determine whether individual items are exported from here or from Singapore and Malaysia. At present the demand for

the company’s conveyors is taxing local production facilities because of the current manpower shortage.

One of the aims of overseas manufacture is to take pressure off the small manpower resources available in New Zealand.

Mr Bruell says that Rex Manufacturing in Auckland is eliminating one shift for lack of capable process workers and storemen a production problem which retards the company’s export programme. Mr Bruell says that a further nagging hindrance to exports is shipping. In four and a half weeks overseas he did not receive a single complaint about the quality of his company’s products, but plenty about deliveries dependent on shipping. In spite of difficulties Mr Bruell reported the latest export successes of his company—an order for 600,000 castors for Philadelphia, won against competition from Israel to Hong Kong, and a deluge of orders from the United States for Rex Consolidated’s own design of flexible, concertina - like conveyor.