Labour’s carpet plan defended

Press, 24 June 1981, Page 11

Labour’s carpet plan defended

PA Wellington . The Labour Party’s proposals to build carpet factories in New Zealand have been defended in Parliament by the party’s spokesman on Trade and Industry, Mr R. 0. Douglas. Answering Government criticism that there was over-supply in the carpet industry, Mr Douglas said there was an imbalance. The over-supply was in tufted manufacturing. “But there is a shortage at this very time of woollen spun yarn.” As a result carpet making machinery lay idle.

•This year New Zealand would not fill its spun yarn carpet export quota to the

United States. Some manufacturers were trying to buy woollen spun yarn from other makers, he said.

Labour wanted to establish “immediately on becoming the government” a woollen spun mill at Dunedin.

“We need that now, because there is a shortage of woollen spun yarn in New Zealand,” Mr Douglas said.

“The . second proposal is that we would undertake market research in the United States at a cost of $500,000. We would then test the market in one or two cities. This would involve opening a number of retail outlets, advertised heavily. This part of the programme

would be undervvritt.il by the Government.

“If. after opening the retail outlets, we fail to sell a yard of carpet, the loss would be less than half the cost of the Winstone Samsung pulp mill at Karioi,” Mr Douglas said.

After the market had been identified as economic, the building' of carpet and spinning mills would go ahead. Labour’s proposals had been criticised by U.E.B. Industries, but that company had taken up Labour’s suggestions on marketing in the United States, he said.

Earlier, debating a notice of motion bn the issue, Mr P. C. East (Nat., Rotorua) said there was no sense at . all in Labour's proposals. The idea of carpet factories was “halfbaked” and took no account of the fact that the industry ran at only half capacity. The jobs resulting from the plan would not be available for another six to eight years and that was too long to wait,” Mr East said. U.E.B. Industries, Ltd, has since said it was nonsense to suggest that the company had taken up Labour’s ideas, and now sold, carpet successfully in the United States, The company’s managing director, Mr G..R. J..Tedcastle, said that Mr Douglas was “widely astray” in saying U.E.B. was implementing proposals the Labour Party put to it six months ago. Mr Tedcastle said U.E.B. had sold carpet for the last five years to a retail organisation which, as part of its expansions, opened a new store in Manhattan last October and included U.E.B. carpet in its range. “Mr Douglas seems to believe that New Zealand needs only to wave some sort of magic wand and Americans will be falling over themselves to buy our carpet.

“U.E.B. has been actively marketing in the United States for the last 10 years. It is an extremely difficult market to crack and any success we have achieved has been the result of intensive marketing groundwork, not least establishing what -appeals to Americans and offering the right product accordingly,” Mr Tedcastle said.