N.Z.F.F. plans will make 280 staff redundant

Press, 27 February 1980, Page 27

N.Z.F.F. plans will make 280 staff redundant

PA Wellington New Zealand Farmers’ Fertilizer Company, Ltd, plans to close its nationwide pharmaceutical wholesale distribution network, and lay-off about 280 staff. In a statement, the company said the move was part of a restructuring of its commercial activities in the areas of scientific, dental, medical and health supplies. “We have announced this decision to our staff and the closure is to take effect during March,” Mr Riddell said. “Our major difficulty in reaching the decision to take this action was our awareness of the redundancies it would cause. Staffing level will be reduced by approximately 280.

“We have endeavoured to place as many people as possible within our three new companies or in other divisions of N.Z.F.F. We are also opening lines of communication to find employment for others within companies which will require additional experienced staff to cope with the increased volume of business they will have available to them. N.Z.F.F. intends to form three new companies to trade in the pharmaceutical manufacturing, dental and medical/scientific supplies and equipment areas. Manufacturing will be conducted by a company to be known as Chem Industries N.Z., Ltd, the dental supply company would trade as Shalfoon Dental, Ltd; and medical and scientific products would be marketed by Kempthorne Medical Supplies, Ltd. The managing director of N.Z.F.F. (Mr P. G. Riddell) said an unfortunate effect of the changes would be the closure of the company’s pharmaceutical wholesale distribution network. New. Zealand Farmers’ Fertilizer, Limited, purchased Kempthorne and Prosser and Company, Ltd, in late 1978, the fertiliser interests of Kempthorne and Prosser were sold to Ravensdown Fertilizer Co-op, Ltd, and N.Z.F.F. retained a 40 per cent interest.

“Then, in order to strengthen the pharmaceutical division of Kempthorne and Prosser, N.Z.F.F. bought Medical Supplies, Ltd, in the hope that the additional volume would enable profitable operation under one management,” said Mr Riddell. “However, the difficulties encountered were of such a

nature that we were led to review our future operations, and make a decision in the best interests of shareholders and staff alike. “The area of greatest concern was the pharmaceutical wholesale division where the trading activities of the pharmacist co-operatives were badly eroding margins. “We took all possible steps to correct the position, but, with the quite proper Government policy of seeking to reduce the cost of 1

Ihealth care, there seemed! little prospect of changing I; legislation. “This legislation prevents ■ pharmaceutical wholesalers j from trading as retailers, but does not prevent retailers ' operating wholesale co-oper- ; atives. I' “The consequent level' of ; rebates, required to maintain: a market share, has meant! there is simply insufficient;! margin left to make the!! operation viable,” he said. , i Mr Riddell said the only!)

I course available was to form ; I separate companies to trade' jin the areas where N.Z.F.F.) could expect to remain) profitable. “We were aware we would have to face criticism and disappointment but de-' ! laying the decision would not have changed the results, ) which we saw as inevitable. I I “It is my view that the) ) interests of staff have been I better served by making this' decision sooner rather than I later,” he said.