New Zealand Steel optimistic

Press, 5 August 1983, Page 14

New Zealand Steel optimistic

PA Auckland New Zealand Steel expects a steady recovery over the balance of the calendar year, the chairman, Sir Alan Hellaby, told the annual meeting. The significant decline in domestic orders which became apparent a year ago has continued and will affect the result for the current first half, he said. “However, domestic orders on hand for the balance of this calendar year, indicate a steady recovery of business.

“Moreover, recent announcements concerning lower interest rates and the resulting stimulation of housing and other invest-

ment make us confident that the improvement in business will continue into the next financial year. “Exports have continued at high levels and there are some signs of improving international prices.” This year the company was unlikely to repeat last year’s record profit but under the circumstances the result should be satisfactory, he said. Commenting on the company’s expansion plan, Sir Alan said attempts to compare the expanded operation with the problems being faced by overseas competitors needed to take into account the fact that much of the present world capacity, particularly in Europe and the United States, was old and out-dated.

In the present downturn in the world economy much of this inefficient capacity was being taken out of service.

“A consensus of overseas steel market analysts forecast that by the time our plant comes on stream, world steel demand and supply will be much more in balance with firmer prices.

“There is already a marked upward movement in the value of some international steel products.”

He said that discussions on the future of steel products under C.E.R. were continuing. Some delay was being experienced as a result of negotiations between the Australian Government and their steel industry concerning future Australian protection policies.

“However, we believe that it will be possible to establish the agreements required within the period S rescribed.” (One year from anuary 1, 1983.)

Stage one of the expansion project at Glenbrook was running well on schedule and in line with budget. Steel for the new project was programmed for. production by the end of next year.

Tenders had been received from five international bidders for stage two of the development and were now being assessed. Final selection of the final bidder was planned for the end of this year.