N.Z. Steel ‘must expand soon’

Press, 7 December 1981, Page 29

N.Z. Steel ‘must expand soon’

PA Auckland If the Government changes in favour of Labour, any delay to New Zealand Steel’s expansion plans will prove expensive, says the company's managing director. Mr John Ingram. He told the Auckland Chamber of Commerce there was no doubt that Labour favoured the expansion, “but it wants to be reassured.” He was confident that his company could prove the worth of the project, but delays would be unfortunate and costly. The expansion would be good for New Zealand, good for shareholders, and good for customers. The “commercial case" for it was good and robust and it would stand a fair amount of risk. Although the international steel market was over-sup-plied now, the industry's

capacity would be 90 per cent used by the second part of the decade, and prices would rise. The company was adopting the principle that the ideal time to buy a straw hat was in winter. To a questioner who asked how many other steel companies were also buying straw hats now, Mr Ingram replied that very few were. They did not necessarily have the local resources, and if they did they did not have the cash for development. He said he was sometimes asked how a small company such as New Zealand Steel could be internationally competitive. Among the reasons Mr Ingram gave were that iron sands were only 20 km away from Glenbrook, and that the main market, Auckland, and coal supplies were only 64 km away.

He said the company had not been very good with its public relations because it had assumed that Government approval for the project w’ould be granted, "more or less automatically." Because of this it had omitted really to tell the public what the advantages of the expansion were. It was unfortunate that the project coincided with the Government's “think big" strategy when it was not part of that at all. The company was merely completing a project started with its founding in 1966. But it could not think of expanding until it was profitable, as it was now. Mr Ingram said later that 75 per cent of the project had already been covered by tenders.