Welcome for new factory

Press, 14 August 1980, Page 13

Welcome for new factory

“The Canterbury Manufacturers’ Association welcomes the decision by New Zealand Drum Makers, Ltd, to establish a manufacturing plant in Christchurch, as it recognises the importance of the South Island as a major manufacturing area,” said the association’s director (Mr I. D. Howell).

“The company will be the only manufacturer of drums and steel containers in the South Island. Up to this stage, the company has been one of two such manufacturers in New

Zealand, with its other factory based in Auckland. “It is significant that one of the reasons for this expansion is the high freight costs between the North and South Islands.

“This typified a problem faced by South Island manufacturers in getting their products to the main markets in the North, and for North Island manufacturers in servicing the South.

“It is good to see this new factory creating jobs for local people both in staff and management capacities. “Besides this new factory, and the establishment of a number of other new industries, a Canterbury Manufacturers’ Association survey showed that this year 42 companies in Canterbury are involved in developments worth $18.4M.

“That expansion, ranges for a major investment of $7.5M in one company to the smallest of $lO,OOO at another.

“The major investments cover a wide range of industries, including glass, footwear, rubber, food, clothing, furniture, timber proructs, engineering, electrical, electronics and the building industry. “In many cases, expansion is aimed at products not needing a heavy

freight cost for the finished product. “Those freight costs, plus freight delays at times, still cause the major problems for South Island industries. “However, the Government’s 25 per cent concession for industrial electricity has helped South Island manufacturers, although power charges are still not as low as some in the Auckland area. “I believe that if the country’s full export potential can be reached, unemployment will be halved, perhaps by 1984. “At present, manufacturing exports earn 25 per cent of the country’s export earnings and, equally important, manufacturing employs 25 per cent of the work force.

“With the fairly static domestic market, many manufacturers for some time have been putting more effort into exporting, and the results already show in these companies. “The establishment of New Zealand Drum Makers’ Christchurch factory will be of tremendous value to companies exporting their products in drums; it is significant of the importance of having locally based industries supporting export companies.

“If the present high in-

fiation rate can be reduced and wage rates held to a reasonable level by June, 1 9 8 4, manufactured exports will have increased in volume by another 71 per cent compared with 1979-80. “Overall, New Zealand, with its energy potential, its export prospects, and its educated labour force, could achieve .a much higher standard of living.

“I have doubts about the present Industry Development Commission’s march towards industrial reform in this country. “Some industries are reluctant to commit themselves to expenditure for expansion until they find out what the Government industry studies, have in store for them. “And while the studies are allowing manufacturers to discuss their problems, there is concern that some of the studies are being conducted entirely by government officials, with no practical knowledge of the marketplace or the problems created by changed policies.

“Unfortunately, this is all happening at a time when there is a need to stimulate private investment and create more job opportunities,” Mr Howell said.