Tasman exports vulnerable

Press, 8 July 1976, Page 17

Tasman exports vulnerable

PA Auckland Because exports account for about 68 per cent of the total sales of Tasman Pulp and Paper Company, Ltd, the company could have a serious marketing problem if inflation in New Zealand was not brought under control in the near future, the chair-

man (Mr J. C. Fletcher) said at the annual meeting. Export earnings last year exceeded the total sales for the previous year. Protest stoppages since the end of May cost the company more than s3m in lost output. This was virtually all overseas exchange, which could never be recovered.

The lost production consisted of 5100 tonnes of newsprint, 4600 tonnes of pulp, and 5400 cubic metres of sawn timber. The commissioning of the No. 3 newsprint machine has caused problems, but there was every indication that machine performance had now settled down, and production in the future should be at a good and sustained level. The company was faced with cost increases since the beginning of the year for rail and sea freight of $6.2m, and electricity of s3m. However, it expected to be able to save more than s3m

'a year in the purchase of fuel oil by harnessing the new geothermal steam bore. Tasman charged $2,133,000 against profits last year for exchange losses, and since balance-date, there had been a further weakening of the New Zealand dollar. This weakening applied against those currencies in which the greater proportion of Tasman’s overseas loans were denominated—the United States and Canadian dollars—with a consequent increase in unrealised losses of about s2m. There were some signs that the trend might have been arrested, and it was hoped there would be some recovery, Mr Fletcher said. Under the Limitation of Dividend Regulations, Tasman’s maximum interim dividend would be 3.833 per cent in the current year. The consent to pay a high dividend would be made if considered appropriate at the time, he said.