B.H.P. defers its expansion plans

Press, Volume CXV, Issue 33887, 5 July 1975, Page 18

B.H.P. defers its expansion plans

(Netn Zealand Press Association—Copyright) MELBOURNE. The Broken Hill Proprietary Company. Ltd, has deferred expansion programmes and begun a cost-cutting campaign, because of a sharp downturn in steel orders.

A B.H.P. spokesman said; -that the reports of the cutbacks did not come from the ■company, and said that B.H.P. is making no official comment on them. But company (sources said that the reports were correct, and seemed to be based on information from suppliers affected by the cutback. The reports said that B.H.P. planned to defer all new capital expenditure, cease all outside contracting at steelworks and handle work internally, i stop all overtime at steelIworks except when unavoidable. and cancel orders fori (supplies and materials where-( j ever possible. “The move reflects a: tightening cash-flow in B.H.P.’s steel division and; continuing deterioration ini domestic steel demand, par-

■ ticularly for flat steel pro-! ducts which account for! (about 40 per cent of the; company’s production. Sharply rising costs, higher operating costs, declining steel profits, and the need to finance higher stocks have all affected the company's cash position. 8.H.P., however, has not cut production or reduced its work-force. The company awaits a deci-; sion from the Prices Justifica-1 tion Tribunal on its applica-J tion for a 14 per cent price! i rise for steel to lift profit-j ability for its iron and steel; division. During the tribunal hear-! (ing, B.H.P. said that its! planned expansion programme depended on its receiving a significant pricerise.