Manufacturers could switch direction

Press, 9 August 1985, Page 8

Manufacturers could switch direction

New Zealand manufacturers might have to look elsewhere for their manufacturing requirements if the costs in this country got out of hand, said the chairman of PDL Holdings, Ltd, Sir Robertson Stewart, yesterday. He told the annual meeting that the costs in New Zealand, plus the strong New Zealand dollar, were bringing about an uncompetitive situation in Aaustralia, particularly against those products imported from Third World countries by Australian trading outlets. “It is obvious that these

policies may cause a situation for manufacturers in general to look overseas for more and cheaper products than those manufactured in our own country,” he said. Australian companies were now arranging for products to be made in China, in co-operation with Hong Kong interests, because of the constantly increasing manufacturing costs in Australia. “It seems obvious that New Zealand will be facing these same difficulties in the near future.” PDL’s directors considered that the Government intended to bring more competition into New Zealand industry, and

they planned to be more competitive and selective, particularly in buying raw materials, both local and overseas. "We are thinking about bringing materials into New Zealand, because the materials here are too dear.” PDL had taken advantage of export incentives by using the money to buy new plant for more efficient manufacturing and spending millions on toolmaking and plastic moulding equipment. The removal of the incentives meant greater taxation from profits and less to spend on high technology equipment. “I have to say, in passing, that there has been a tremendous amount of criticism from the news media and politicians about getting something for

nothing — that export incentives are a bad thing.” Yet PDL had used the export incentives to build up the company, increase exports, and employ more people, Sir Robertson said. The company had again broken records in the first four months trading to July 31. Total sales had increased 30.2 per cent to $11,498,000, and net sales (excluding inter-company trading) rose 27.7 per cent to $B.l million. Exports increased 13.9 per cent to $4,059,000, compared with the same period last year. The four-month period last year was the best in the company’s history, but this had been bettered, “which is staggering to me,” Sir Robertson said.