Skellerup overseas to beat quotas

Press, 16 August 1985, Page 8

Skellerup overseas to beat quotas

Skellerup Industries, Ltd, expects this financial year to be challenging but the’ directors are confident that the group will maintain its growth in profitability during the vear. the chairman. Mr P. J. 'Skellerup. says in his review with the annual accounts for the year ended March 31.

.As reported, the Skellerup group increased net operating profit from $7,632,462 to $8,574,989 in the March 31 .vear. The 25 per cent dividend is covered 4.3 times and Mr Skellerup says that the company intends to maintain this rate after the 50 per cent increase in capital because of cash and bonus issues Export sales of $8.6 million fell short of aspirations, primarily because of a depressed dairy market in Europe which caused a reduction in exports to that area.

As a result of these quotas the company last year set up its own clothing manufacturing unit in Tasmania. Tnis has the potential to double its existing workforce and if tbe initial demand for its products can be maintained the high staffing level should be reached in tbe not too distant future.

In July last year Skellerup also required the Aucklandbased Dorios Products. Ltd. marine clothing distributors. The manufacture of the Dorion lines by existing members of the Skellerup group gave a great impetus to the Tasmanian ‘operation as the brandname was well known in Australian yachting circles. The company has to date seen little benefit from the much-vaunted CER agreement with Australia. Mr Skellerup said.

"We continually hear of the benefits that CER will bring to -New Zealand manufacturers,” he said.

“But while the present quota systems are operating in Australia the two Skellerup products which show the greatest

immediate potential namely waterproof clothing and waterproof footwear, are effectively locked out apart from when our distributors, obtain quotas from another source." says Mr Skellerup. Further expansion was also undertaken in Malaysia with the purchase of a holding in a company in Kulim. Kedah in northern Malaysia. This company has tbe potential to make a’ wide range of compounded rubber products in contrast to tbe present subsidiary. Skellerup Industries (Malaysia) whose main activity is in the dipped goods

area. However, the long-estab-lished companies, in the group are still tbe main conbributor? to its profit Mr Skellerup said Para Rubber showed no profit growth after a ■'considerable" stock write-down. The manufacturing units performed up to the level of previous years. The, flooring group performed well but experienced liquidity problems because of the changing nature of products handled. The two p’las-tics-oriented companies ' Ultraion and Rotoplas. showed considerable increases on 1984.