COMMERCIAL I. W. Dow sales volume fell 18 per cent

Press, Volume CXVI, Issue 34131, 19 April 1976, Page 16

COMMERCIAL I. W. Dow sales volume fell 18 per cent

(Neto Zealand Press Association) NEW PLYMOUTH. While Ivon Watkins-Dow, Ltd’s sales declined in 1975, profit declined even more severely, says the managing director (Mr R. F. Bollen) in the annual report.

"As predicted in last year’s annual report, 1975 proved to be a difficult year for the country and for our company,” says Mr Bollen. "Increasing costs resulting from the high rate of inflation, the deepening recession and a fall-off in the demand for most products had a marked effect on sales and profits. "Consolidated sales for the year were $15,275,837, which although down 8.8 per cent from last year’s record sales level still rank in value as the second highest sales recorded by our company. “The volume of materials sold, however, decreased 18 percent, which more clearly illustrates the impact caused by the downturn in the economy and the resulting massive stock reduction undertaken by many of our customers.” Mr Bollen says consolidated profit after tax was $710,329 — down 42.7 per cent from the profit performance in 1974. This reflected the complexity of trading conditions in the market place, and the difficulty in fully recovering costs which escalated continuously under the pressure of worldwide inflationary conditions. “Though domestic sales declined in 1975, an aggressive programme aimed at further developing and stimulating export sales produced excellent results,” he says. “Our export sales for the year amount to $2.3 million, compared with about slm in 1974, and would have been $3.5m but for the deferment to early 1976 of a substantial order of pesticide which was scheduled for shipment to Indonesia during the last quarter of 1975.

“The successful development of this export business was an important factor in the tum-around in our profit performance from the loss

position reported for the first half of the year, since the tax benefits earned on these sales resulted in a substantial reduction in the tax liability in our 1975 profit. “In our last annual review we reported that the company had announced plans to construct a new phenoxy plant to replace the existing plant. “This plant, as well as the other production and service facilities, requires significant renovation to meet presentday operating, safety, environment, and fire protection standards. “The Government has agreed that the renewal of plant and equipment is clearly desirable if the company is to continue its important role in the agricultural chemicals industry, and has given support to our modernisation programme. “This programme, which now includes substantial site servicing improvements as well as renovation and replacement of plant and equip-

ment, is estimated to cost sB.6m over the next five i years, with the first and i most important phase ex- < pected to be completed by i mid-1977.” < In the directors’ report the 1 chairman (Mr D. A. Watkins) ] says that the devaluation of 1 New Zealand’s currency in

August last year was a major contribution to the company’s losses of $440,000 related to foreign exchange transactions which could not be covered by forward exchange contracts. Referring to the company’s petro-chemical interests, he says: “The company’s interest in the Maui natural gas field is evidenced by the continuing help being given to the Government petrochemical study group, and we await with interest the release of the report from this group mid-1976.”