PPC advocates changes

Press, 13 November 1981, Page 9

PPC advocates changes

Rationalisation of New Zealand's printing and packaging industry may be required, according to the chairman of Printing and Packaging Corporation, Ltd, Mr w. B. Barnes, in the annual report. It would appear that there was a surplus of equipment in both the printing and packaging industries, and consequently a significant under-utilisation of the equipment, he said. “The long term solution could well necessitate some rationalisation of both the industry’s and the company’s activities.” Although the group was increasing its efficiency in the industry, there was concern about the unceasing flow of plant and machinery into New Zealand, with the apparent disregard for the

ability of the domestic market to absorb the output of this equipment, Mr Barnes said. The use of overseas funds for this purpose was questionable, and there appeared to be room for rationalisation in the industry. Government guidance on the matter might be justified, and the need to use installed plant effectively might well be a study by the Industries Development Commission. Inquiries into the packaging and plastics industry were made during the year, and the recommendations were currently under study by the Government. “We are particularly concerned with one of the commission’s proposals to allow the importing of plastic packaging, as we cannot compete with imports from

low labour-rate Asian countries,” Mr Barnes said. It was difficult to predict the future with some assurance, but it was comforting that there were signs of increasing activity in the printing and packaging divisions. It was less comforting to consider maintaining a viable, and, if possible, expanding business under the continuing high inflation rate, together with high unemployment and unrest. The group had effective management, technical expertise, and modern production and retailing facilities, and the directors were confident of future prospects, he said. The total group net profit, after extraordinary items and minority interests, fell 21.1 per cent to $2,604,075 in the year to June 30. Extra-

ordinary profits totalled $360,062 ($545,008 previously), and minority interests rose $1560 to $7966. Sales increased 11.5 per cent to $91.5 million. The final result was after providing $1,041,673 less for tax at $597,318, but $48,792 more for depreciation at $1,497,075. A recommended final dividend of 10c a share (6c taxfree) gives a steady annual rate of 16c a share (16 per cent). The dividend requirement is $1,189,293, and it is covered 2.0 times after allowing for the preference dividends. Shareholders’ funds improved $1,783,115 to $30,626,830, including ordinary capital up $400,532 to $7,433,083 after the issue of shares at a premium of 100 c each to N.Z. Forest Products, Ltd.