Chemby prospects in China

Press, 15 August 1984, Page 35

Chemby prospects in China

PA Auckland Chemby Industries, Ltd, says it hopes to win further contracts in China to supply and install scouring and associated equipment worth several million dollars. The chairman, Mr B. L. Macedo, told the annual meeting that Chemby Marketing and the Annett and Darling subsidiary had recently conducted seminars in Peking on the scouring of Chinese wool.

At the request of the Chinese Government Ministry of Textile Industry, they followed the group’s installation in China of woolscouring equipment worth about ?2 million. The seminars had led to requests to quote on further equipment, he said.

The directors said after the meeting that the marketing of scouring equipment in China held the highest growth prospects of all Chemby activities next year. Mr Macedo told shareholders that results for the group in the first four months of this financial year were “well ahead” of the period a year ago. “The buoyant trading conditions show no signs of slackening in the near future, although the effect of devaluation on New Zealand industry is not yet apparent,” he said. the market for 1985 may be somewhat speculative, the strong demand for our plastic and chemical raw materials

both imported and from our own manufacture, is expected to continue at least until December.” Mr Macedo said the trading and closing down losses of the Chemby Engineering manufactured products division “are not condoned, and cannot be glossed over in any way.” It was, however, a “oneway affair which was isolated and disposed of without the rest of the group being infected.”

He said net profit for the rest of the group at $1,066,817 was only marginally below the previous year, which in a trading year “beset with internal problems and political uncertainties is, in fact, not

too bad.” The directors later indicated net profit this year should equate to the previous year “without the Chemby engineering loss.” Mr Macedo, answering a question, said the board was now looking at ways of bringing the group’s various plant locations together. In his address, Mr Macedo said the past year result could hardly be considered satisfactory. He added, however, that Chemby could and would do better this year. The dividend was main-

tained because cash resources were adequate “and shareholders should, therefore, not have to suffer when payment of the dividend is unlikely to prejudice the company’s future.

“In spite of everything, liquidity improved by about $2 million in the year under review and total borrowings were down almost $700,000 at $3.2 million, giving a 49.8 per cent ratio to shareholders’ funds,” he said.

“Although liquidity has tightened somewhat since years-end and working capital requirements will increase from devaluation, the board is satisfied that its decision to utilise reserves for dividends was justifiable.” On balance, it saw no startling benefits or disadvantages from devaluation, which Chemby had survived without loss through currency, exchange management.