ICINZ to further rationalise trading

Press, 1 December 1987, Page 50

ICINZ to further rationalise trading

ICI New Zealand had a difficult and demanding year because of a lower level of business activity in the industrial and rural sectors, said the chairman, Mr John Eddey, in the annual report. Lower sales volumes and strong competition, particularly in the second half, were offset by a determined effort by the management to contain operating costs. "Although there is some expectation of a modest improvement in the rural sector of the economy in the year ahead, that improvement is likely to be offset by the sustained relative strength of the New Zealand dollar, continuing high inflation, and a forecast for little improvement in the level of manufacturing activity.” This outlook presents uncertainties, and activities need to be further rationalised,” Mr Eddey said. The managing director, Mr Ron Arbuckle, said in his review, that in spite of adverse economic conditions,

the company pursued its strategic objective of future growth. The project to extract agar from seaweed will start in June next year. The company and Applied Chemistry will be joint developers of the processing of purene derived from the gas-to-gasoline project at Motonui. Another joint-venture company, ICI Synchem, will determine the commercial viability of a project in a $2 million evaluation due for completion in 12 months. Storage facilities have been redeveloped in Auckland and Lower Hutt at a total cost of $4.3 million. At the Hornby distribution depot new chemical storage bunkers will be constructed next year. During the year the group’s management was restructured. Four general managers, each with assigned specific responsibilities, had replaced the executive general manager. Businesses with similarity in their market operations were grouped

into Chemicals Group and Surface Coatings Group. The Trading divisions business remained at a high volume level for most of the year, although it tailed off in the final quarter. A number of new products were launched during the year. The Guthrie Bowron division continued to be affected by the downturn of retail activity in provincial centres, after the pre-GST boom. The chain of 42 retail stores will be further improved in the coming year, Mr Arbuckle said. “The introduction of eight Lotto agencies at various Guthrie Bowron stores throughout the North Island is a,venture into a new area,” he said. As announced, the trading profit of $14.3 million was similar to 1986. Profit after tax was $9.7 million, including extraordinary gains of $1.3 million (nil last year). This was a 4.8 per cent increase on the year before. ,j b .