Dunlop N.Z expects tight market

Press, 27 March 1980, Page 24

Dunlop N.Z expects tight market

PA Wellington Government policies, and economic conditions will create a tight market for Dunlop New Zealand, Ltd, again this year, the chairman (Mr J. E. S. Hammond) says in the annual report. ‘ Cost increases will also be) particularly evident, especially in the s-upplies of imported raw materials, he says. More competitive conditions have developed in New Zealand generally, as manufacturers have sought to. overcome problems of under-utilised production capacities, and rising costs. “The difficulty of assessing investment opportunities in these circumstances has been compounded by the Government’s intention to reappraise investment protective policies to industry. “However the start of the investment programme to | make New Zealand less.) dependent on imported fuels provides the prospect of an I economic upturn. Dunlop has been working in . its re-i

i cent developments to antici-, i pate this change,” Mr 1ia,..■mond says. ; Recent Government moves jhave dampened the demand 'for tyres. These led the comIpany to undertake cost rei duction programmes, and as I a result productivity has shown significant improvements over the past two or three years. However, the impact of these programmes has been small in relation to the increases in raw material and wages costs. As a result prices to the consumer have moved sharply upwards, tending to depress demand. The company has increased its role in export markets. In 1978, exports rose by 39 per cent, and in 1979 by 60 per ' cent to SI.BM. ■ Mr Hammond says that the company’s diversification programme was being developed through the extension of the Shelter Engineering roofing business in Australia, and the forthcoming purchase this year of Starlite

Industries, with its export business also to Australia. The annual accounts for the t ear to December 31 are again prepared on historic cost, and inflation adjusted terms. In historic terms the pro-! fit is shown to have in-l creased 32 per cent to 1 54.607,000, after tax of| $3,334,000 ($2,929,000.;. I However, the profit) adjusted for inflation, before interest and taxation, was almost unchanged at $4,916,000 ($4,946,000). The profit adjusted for inflation, and after tax, dropped four per cent to $1,676,000.