N.Z. Forest had good start to year

Press, Volume CXIII, Issue 33343, 29 September 1973, Page 13

N.Z. Forest had good start to year

(New Zealand Press Association) AUCKLAND, September 28. The net profit and sales of New Zealand Forest Products Ltd for the five months to August 31 substantially exceeded those for the same period of last year, the chairman (Mr A. G. Wilson) said at the annual meeting.

Increased pulp and paper production from the new mills at Kinleith was largely responsible. Because of a buoyant New Zealand economy and the world shortage of pulp and packaging materials, demand for all company products exceeded productive capacity. As reported NZFP is to make a l-for-8 bonus issue next year and expects to maintain the present dividend rate on the increased; capital. The revaluation of the New Zealand dollar would not reduce the company’s profit “unduly” because many export contracts were) in New Zealand dollars,' prices in overseas markets i were increasing, interest! payments on debt abroad would shrink, and imported raw materials, plant and equipment would be cheaper, Mr Wilson said. MARKET SHARING

A “mutually satisfactory” market sharing and ratio-’ nalisation agreement, with Australian Paper Manufacturers Ltd, under vhich NZFP will continue to supply APM' with kraft pulp and APM products will be exported to New Zealand, had been concluded. Tax incentives for increased exports, withdrawn by the 1973 Budget from unprocessed products, would continue to apply to the company’s contract log shipments at least to the end of this month, Mr Wilson said. Until the third paperboard machine begins production at Whakatane in mid-1976, output from those mills will have to be augmented by imports, he said.

Because of increasing de-l mand, the firm is considering establishing a third , wallboard mill and ex- , panding its multiwall bag- ' making plant. ( The finance for the third ' Whakatane machine and for other projects, including i land acquisition and planting, would be met from internal cash flow and borrowing already arranged, Mr Wilson said. ’