Alcan N.Z. exports offset home fall

Press, 1 April 1980, Page 21

Alcan N.Z. exports offset home fall

p.A. Auckland Alcan New Zealand, Ltd, has satisfactory orders, and a relatively buoyant export demand is offsetting a depressed local market, says the chairman (Mr J. B. Clarkson) in his annual review. ' However, Alcan's competitive edge overseas might be eroded as costs in New Zealand rise — particularly those for ingot, he says. As announced, a big rise in export sales helped the company to increase net profit 46 per cent to $2,886,365 in the year to December 31. The dividend rate is being increased to 24 per cent (12c a share) from the previous year’s 20 per cent, which was the equivalent of 23 per cent on capital before a one-for-four bonus issue. Because of the continued

low level of demand in the building industry for archi- ; tectural joinery, the direct- i ors have decided that the new extrusion press at present in storage in Christchurch should be sold -to overseas interests.

Negotiations are under way, and it is hoped they will be concluded without loss to the company. The return on average shareholders’ funds for the year was 19.3 per cent (15 per cent). Total shareholders’ funds rose $1,937,532 to $15,945,888. On a tonnage basis, sales for the year rose nearly 38 per cent. -Total production increased 36 per cent, mainly because of higher export orders for sheet and foil se m i-fabricated products during the second half of the year.

The export businesses, and associated tax incentives of $1,523,000 had “a most important impact on the company's profit.” Export sales jumped from $140,000 in 1978 to $4,735,000 in 1979. New markets were opened in Hong Kong, Singapore, Australia, the United States, and Indonesia. With business at a higher level the company expects that new borrowings of S2M will be required this year for extra working-capital, and fixed asset expansion. It is planned to extend the sheet plant building, at a> cost of more than $700,000, i to provide space for in-' creased production. The company is also planning a major updating of extrusion die-making facilities using the most modern con-i trol equipment This will! cost $470,000 this year.