Andrews and Beaven optimistic

Press, 28 October 1981, Page 27

Andrews and Beaven optimistic

Andrews and Beaven, Ltd, looks forward optimistically to the growth opportunities for the 1980 s, and will be ready to take advantage in all areas of expansion where the company’s wide range of products are applicable, says the managing director (Mr W. B. Beaven) in the annual report for the year ended June 30. Export sales, which grew to a record during the year, have further scope for development, but over a much broader range of products, he says. The group’s manufacturing operations 'have been strengthened to undertake a wider range of work. Thanks to a general upturn

in the New Zealand economy, sales in the new financial year have started on a buoyant note, Mr Beaven says. After’ a record year in 1980 the manufacturing division had a reverse in its profit position. Increased turnover was insufficient to cover overheads and increased costs. The service divisions all performed creditably. The expected upturn in the engineering industry from the Government’s planned major resource projects has been slow to develop and has made only a small contribution to the end-of-year results. The engineering product divisions traded in static market conditions with ex-

cellent results and ended up as the highlight performers for the company. In a full discussion of the automotive parts industry the chairman (Mr W. B. Barnes) says that rationalisation is essential. The acquisition of the parts division of Motor Traders, Ltd, should provide stability, Mr Barnes says. It would probably see a doublirtg of turnover in the automotive parts division and allow the company to achieve acceptable stock turn rates. Referring to this division’s performance in the latest year Mr Barnes says it performed admirably in a mar-

ket where price cutting was both unreal and unnecessary. The changed conditions in the parts industry were in no small measure because of the swing from European to Japanese cars. “This market has been in total disarray, involving in many cases quite unjustified price cutting. It has been recognised for some time that only a total rationalisation of this industry would provide the stability essential to ongoing profitable trading," he says. “Quite apart from the changing market conditions in respect of vehicles, there is also the growing problem of handling large volumes of

low cost goods with ever increasing labour costs. “New Zealand possibly has a greater variety of models of motor vehicles than any country in the world and needs enormous stocks of parts to service this fleet. Rationalisation is therefore not only desirable, but essential.” Of the modest growth in group sales (up $3.5M ’to $68.2M) the chairman says drought in the lower half of the North Island and the east coast of the South Island depressed sales of tractors and agricultural equipment. In addition, the curtailment of log sales to Japan restricted sales of tree harvesting equipment.