ASTEC to try and break even

Press, 12 May 1987, Page 52

ASTEC to try and break even

PA Wellington ASEA Tolley Electric Corporation, Ltd, (Astec) aimed to break even this year, after last year’s $4.4 million loss, the chairman, Mr Lyn Papps, told the annual meeting yesterday. He said the company’s difficulties carried over into part of this year and would affect this year’s result, as would the costs of redundancies..

Another possible effect was interest rates, which had been exorbitant this year, he said. With these qualifications in mind, though, the board believed . actions taken by it and managment had resulted in a much stronger, more profit oriented organisation. “We remain confident that the company has turned the corner and that normal trading in the second six months of the current financial year will show a strong trend towards profitability,” Mr Papps said. Astec’s main problem area in the 1986 year was its switchgear division. Mr Papps blamed the disruption and costs of moving the five trading plants to a Henderson site as being far greater than expected. “This was not immediately apparent, but became increasingly evident after the opening of the Henderson plant in May of last year,” he said. Steps taken included the appointment of Mr Ove Stoltz, from ASEA, AB, of Holland, as manag-

ing director, who had turned around the switchgear operation. He

had turned it into divisions and reduced overheads by moving the company’s head office to the Henderson site.

Mr Papps welcomed the. deregulation and abandonment of import licensing which he said brought' both challenges and op-' portunities. “We welcome s this chance to show that we can be as good as 1 our overseas competitors. This is particularly so in view of our technical and financial association with ASEA, AB.

“Competition should, however, be fair and it is alarming to observe in the electrical industry that some regulations still exist which tend to favour Australian manufacturers.” In spite of this it was pleasing to note that ASTEC had recently received significant initial orders from Australia.-'ln addition, business with ASEA Australia was expanding rapidly. The company has changed auditors from Peat Marwick to Price Waterhouse.