Warning from Carter

Press, 15 July 1985, Page 32

Warning from Carter

Strong export performance has given Carter Holt Holdings, Ltd, a good start in the new financial year, in spite of some levelling in domestic trading. However, the chairman, Mr Richard Carter, sounds a warning on the impact of higher costs. Commenting on the big Pan Pac pulp operation, Mr Carter says that although devaluation during the year helped the operation in its international market prices, it was most disappointing to see most of these benefits dissipated late in the year by significant increases in government charges. “In particular, dramatic increases in road user charges and electricity prices, along with indicated forest stumpage rates under the new government policy, clearly create some concern for the future.

"With 1 million hectares of radiata plantation forests New Zealand must take care to ensure that those products, with a natural international advantage, remain internationally competitive.” As reported, in the latest year Carter Holt net profit (before extraordinaries) rose from $24.4M to S3BM. Export sales rose from

SI32M to SIB7M. In this connection the big Sealord fishing operation was prominent, with exports of ?77.7M accounting for 41.4 per cent of total exports. Pulp exports totalled $62.3M and timber products etc. ?47.7M.

Dealing with the various divisions, the report says the planted forestry area rose by 2299 ha to 25,083 ha, while the takeover of Southern Australia Perpetual Forests gave the company 22,668 ha of planted land across the Tasman.

All sawmilling operations in the New Zealand group operated to the limit of their log availability. Results in the Australian operation exceeded expectations. Order books are stretched, with prices firm over the range of production. At Pan Pac the pulp production unit again saw an increased level of refining energy being provided to increase the added value of the pulp. Additional dewatering equipment was installed which will allow for further additions of energy and added value next year. Canterbury Timber Products’ domestic sales remained buoyant and required allocations to be made to all distri-

butors in spite of increased production capacity. Deliberate contraction of some export markets was found necessary. Wood Export, Ltd, exported its second-highest chip tonnage from Mount Maunganui. Demand is such that some new longer term contracts will need to be serviced from the company’s new operations at Portland, Australia.

Sealord had another year of rapid expansion and growth. The combined fleet of owned and joint venture vessels harvested 54,591 tonnes of wet fish from the exclusive economic zone.

Although Orange Roughy has become the glamour export fish, indications are that Hoki will be the significant expanding white fish resource marketed in the future, Mr Carter

says. Sealord is making a major thrust in combining Hoki with other natural New Zealand resources with the determination to open new markets. The latest year’s good result was accompanied by an increase in tne basic dividend from 22 to 24 per cent, with an extra 4 per cent bonus added. The dividend is covered 3.3 times.

The company now plans to repeat last year’s l-for-5 bonus issue.