Skellerups sales up, but “outlook not good”

Press, 28 November 1977, Page 24

Skellerups sales up, but “outlook not good”

Commercial

“Sales for the six months! since the March balance date! of Skellerup Industries, Ltd,; are 26 per cent ahead of last; year,’’ said the chairman (Mri Vai Skellerup) at the annual; meeting in Christchurch. ' “This is ahead of inflation,; but the profit outlook is not; so good. Forward orders arei as thin as they have ever; been,’’ said Mr Skellerup. “The Government needs to; pull something out of the bag; for the economic outlook to! improve.’’ The company is handicapped by lack of liquidity,; and the one-for-five cash; issue to follow the one-for-four bonus enlarged capital,! will raise $500,000 for new] plant. “We badly need to modernise our shoe plant,; and finance is needed for the capital outlay on a continuous vulcanising extruder, and for big hose planned at the Empire Rubber Mills, Ltd. “The mills have handled $BOO,OOO worth of sales in the eight months of this year, and expects record exports this financial year,” said an associate director and general manager of Empire; Rubber Mills (Mr S. M. Betty). “The order book up to 1978 is well up to expecta-j tions, but the lack of orders! for the latter part of next!

; I year is some cause for coni’cern,” he said. .. “Up to 1974-75 the com:;pany’s profits were ploughed ■iback into new equipment. 11 but now they are having to be used to offset the effects ..of inflation,’’ said the deputy chairman (Mr P. J. Skelillerup). •I “Further redundancies will [have to be made at Marahthon Rubber Footwear, Ltd, ;‘if orders do not improve > i soon.” he said. “There has been a severe down turn in forward orders ■ (for footwear but we hope to ’(finish the 12 months with •(comparable sales of water- • ] proof footwear, and perhaps ' | some reduction in canvas I sporting footwear.” ’! “We are currently negotia- ■ Iting with new Australian ’ agents, and have applied to • have gumboots included in • Schedule “A” of N.A.F.T.A. ; which, at a reduction of 14 . per cent in duty, will make us more competitive in AustraI lia,” said Mr Skellerup. 1 The Rotocure division of • the Atlas Rubber Company, ’ Ltd, had a successful 1977 ] year, which included the just ' completed contract for 'lBlkms of belting for the Huntley Power Project. The company has also '(produced the first New Zealand made belt being used ’lon the Kanieri Gold Dredge. :IThe division has diversified

-ito meet the widening mari ket. and to reduce imports -jin this field into New ZeaIl land. Orders are also thinJner, but. versatility is. the jikey to this division’s = (success, the meeting was! ; told. “Exports are in a very healthy state at Batavian i Rubber Company, Ltd said a . director and general manager of that company (Mr K. ii'J. Nysse). I “We don’t expect to pay J any company taxation this! financial year. Sales are 27 ’(per cent ahead this month ’ i compared with the same (period last year,” he said. ’( “Exporting is where the ’’growth is, as domestic ’’(growth is negative. But, I 'believe that a more flexible '■approach to exporting is I !needed. .’] “Only last week, we sold ’our know-how to an Iranian ■(company planning to establish a rubber factory in ’(lran,’’ said Mr Nysse. ’I “The quality of salt prodticed by Dominion Salt, fl Ltd, is high enough to meet .British pharmaceutical H standards, as well as those tlof the New Zealand Dairy ■(Research Institute, said Mr ?jP. J. Skellerup, reporting on (that company. i| “Dominion Salt is now ■ supplying 95 per cent of the l|salt used in New Zealand on .(both the domestic and indus-i I trial markets.”

“The one tonne exportec to Coca Cola recently had tc be up to British standards, and there is a bright future : in exports of vacuum grade salt not produced in Australia,” said Mr Skellerup. “Freight costs are a major (concern to us. It costs $2B a i (tonne to transport salt from ’(Grassmere to Auckland, and ■(only $29 a tonne to bring salt from Bonaire in the fCarribean to Mount Mauinganui for processing by .’Dominion Salt.” '! “Foam latex rubber is 11 going through a particularly s lean time,” said Mr V. Skellerup. ; “Staff have been reduced - by one third, and the com- ] j pany is at present maintain'ling production at 1974 ’(levels,” said the genera. 1 manager (Mr D. FosterI (Lynam). iI “We can still show a -iprofit, though it will not be ijas good as the last twe (years. I “The company has made ,(inroads into the field of car : ’ pet underlay, and sees this lias an answer to surviving ijthe present downturn,” he r said. The bonus and cash issue; i were approved, and a fina! dividend of 10 per cent (5c a ’ share) is payable. The directors fees were i raised from $lOO to S2OOC (for each director and $3OOO 'for the chairman.