N.Z.F.P. begins year well

Press, 6 September 1980, Page 19

N.Z.F.P. begins year well

PA Auckland The present year had started well for New. Zealand Forest Products, Ltd, the chairman (Mr L. N. Ross) told the annual meeting. He said that sales* for the four months' to July 3 were almost 28 per cent higher than in the corresponding period of 1979. Profit was also ahead.

Output from the Kinleith Mills was, in most instances, now back to the levels achieved in the second and third quarters of last year. But some plants affected by strike action earlier this year had taken longer than hoped to return to full production.

Mr. Ross said that his directors had no reason to doubt the high levels of production now being attained in the major units would continue for the remainder ■of’this year. . Demand for N.Z.F.P. products in export markets remained high, although there was some evidence that that the effects of the current recession in the United States, might result in pressure of excess American and Canadian supply of wood products in the Pacific area, which provided important markets for N.Z.F.P.

The longterm outlook was good, he said. A feasibility study for the development of a pulp and paper mill and coating plant to be located at Marsden Point, was proceeding. Marketing arrangements in

Australia and Japan were under development and it was expected technical assistance would be secured from both sources. If the studies were satisfactory, the target date for start-up was about 1985. Mr Ross said that N.Z.F.P. was assisting U.E.B. Industries, Ltd, in a re-examina-tion of its proposal to install a paper machine; it now seemed likely the original U.E.B. proposal would be modified.

A commercial plant to produce an industrial adhesive from pine bark was well on the way to completion. It should be in production by the end of this year. A new office and warehouse for the subsidiary B. J. Ball (N.Z.) were under construction in Penrose.

The pipeline to supply natural gas to the Kinleith mills had been laid to the site and work to install feeder pipes to the utilising plants was now in progress. Gas would progressively replace oil fuel from this month. Mr Ross said that N.Z.F.P. was co-operating with overseas interests in making a proposal to the Fiji Pine Commission for the use of a fairly large volume of maturing wood in that country. A number of other parties were known also to be making proposals, and there was no certainty the N.Z.F.P. offer would be accepted. .

Mr Ross said that loans totalling $34 million would become due for repayment

this year and a further $l6 million would be required for plant replacement and improvements, minor capital projects and the purchase of an interest in U.E.B. ,

Arrangements had been, made for a revolving bank facility for SUS2SM to become available this month. Preparations were being made for raising a similar sum by way of a further issue of fixed-interest Eurobonds.