North B.H. defends APPM bid

Press, 30 November 1982, Page 24

North B.H. defends APPM bid

The chairman of North Broken Hill Holdings,. Ltd, has defended the group’s decision to bid for Associated Pulp and Paper Mills, Ltd. Mr Leith Jarman told shareholders at North’s annual general meeting that North B.H. took a long-term view of its investment in APPM. He said that the two groups would make “a very good match” and the sAust 70 million bid was in the best interests of shareholders in both companies. Mr Jarman was questioned about the bid after North's Part A statement, released last Wednesday, which showed that APPM earned only sAustl.s million in the 16 weeks to October 20.

The sharp .contraction in profitability prompted market speculation that North's bid was a life-boat operation on an ailing company in danger of sliding into the red.

“APPM has already initiated action to improve internal inefficiencies which should allow more effective competition' with imported fine papers," he said.

. “These cost reductions are fundamental to APPM's future as the major Australian producer of fine papers," Mr Jarman said. “In the longer term, significant capital expenditures may be necessary for APPM to achieve self-sufficiency in pulp supply and economies of scale in paper-making.”