G.B. Cement looks to rationalisation

Press, 26 April 1984, Page 26

G.B. Cement looks to rationalisation

The demand for cement in New Zealand is down after the Government’s major projects and will continue at about the present level, according to the chairman of the Golden Bay Cement Company. Mr A. S. Paterson says, in the company’s annual report, that considerable importance is being attached to plans for a rationalisation of the cement industry and early approval to go ahead with this is sought.

"The decline in the market led to increased competition with our competitor moving into areas where previously Golden Bay was the only brand of cement available,” Mr Paterson says of last year’s trading environment.

Golden Bay Cement and its competitor, New Zealand Cement Holdings, announced last month they were discussing a restructure of the industry.

“The aim is to create an

industry which can earn rewards commensurate with the funds invested in it, deliver a product competitive in both national and international terms and provide a positive working environment for our staff,” Mr Paterson says. “If we can achieve these goals there will be a good case for continued investment in modern manufacturing facilities in this country.” As reported previously, Golden Bay Cement had a group net profit for the year to December 31 of $4.1 million, down 53.4 per cent on the previous year. Domestic sales in 1983 declined 10 per cent to 427,000 tonnes, but a rise in exports to more than double those of 1982, meant total sales were slightly up on the year before. The company was allowed to raise its cement price last year during the price freeze on hardship grounds, but Mr Paterson

says in the report this did no more than maintain sales revenue at the 1982 level.

“It is clear that our group has made a significant contribution towards the Government’s over-all programme to contain and reduce inflation,” he says. The report notes the final cost of the company’s modernisation of its Portland plant is now $4B million. Mr Paterson says completion of this project has put considerable strain on cash resources which were supplemented last year with a $lO million share issue and long-term borrowing. Production using the new plant started last May and it is now achieving its required output, he says. Completion of the company’s new depot in Dunedin is near, and this will allow Golden Bay Cement to service its Clyde Dam contract calling for 120,000 tonnes over three years.