Philips seeks better return on assets

Press, 15 May 1985, Page 42

Philips seeks better return on assets

NZPA-AAP Sydney Australia should encourage and maintain a rational and viable electrical and electronics industry, according to Mr Willem Maclaine Pont, the chairman of Philips Industries Holdings, Ltd. “We dislike seeing the country becoming a Far Eastern wholesaler for all its consumer products, and thus lose its own identity in this market segment,” he told the company’s annual general meeting in Sydney. During a “painful reorganisation” Philips had continued to invest substantially in Australia, mainly in communication and defence areas. This investment had been increased to secure future business, such as radar systems, for the RAAF’s new tactical fighter aircraft, the FA-18 Hornet.

Mr Maclaine Pont said 1984 showed a turnaround of the company’s results, but the result achieved still did not provide an adequate return on assets employed and hard work under even tougher conditions was ahead of the company. The company earlier reported a profit of $9,049,000 for the year ended December 31, 1984, compared with a $6,719,000 loss for the previous year. He said post-war Australia, following the pattern of Government-encouraged industrialisation, had been ill-equipped to cope with the growth of competition from the East, particularly as borders * and protection disappeared and markets opened up. "Japanese industry, encouraged by their huge domestic market, economies of scale, commitment to

new equipment, and a dedicated work force, accomplished their success. “Australia, as did the United States and Europe, faced a new reality. As Far Eastern competition penetrated further into traditional markets, radio manufacturing disappeared, television production was limited to large screen sizes, and components confined to high technology micro-electronics. “This competition had to be countered and, consequently, a major restructuring programme was undertaken in your company.” Mr Maclaine Pont said the burden of this reorganisation was now a matter of record, and had to be borne by the profit and loss account — that meant by the members of the company.