BIL and CHH join in packaging venture

Press, 11 October 1988, Page 26

BIL and CHH join in packaging venture

By

SEAN KENNEDY

PA Wellington The packaging industry in New Zealand has been further rationalised with the acquisition by Brierley Investments and Carter Holt Harvey of UEB Packaging, Ltd. In a joint announcement yesterday, CHH and Brierley Investments said they had acquired UEB from New Zealand Equities for an undisclosed sum. The deal is subject to Commerce Commission approval. Its decision is expected by the end of the month.

NZ Equities, which has spent an estimated $lO million on restructuring UEB over the past two years, said the merger was “a necessary part of the rationalisation of the New Zealand packaging industry.” The purchase excludes UEB’s joint venture activities with Australian-owned Kiwi Packaging, Ltd, in the South Island and Well-

ington, and UEB consumer products division and Unibag. A spokesman for CHH and BIL said the new venture would join their existing packaging operation, Printpac, and would be headed by Printpac managing director, Mr Vic Slade.

CHH deputy managing director, Mr Nelson Whineray, said the purchase would mean some redundancies at Printpac or UEB. Printpac employs about 1000 people and UEB around 750. However, the decisions on which plants should close or change could take more than a year. During that time, CHH and BIL expected some natural attrition and staff would also have the option of early retirement. Under the deal, the CHH and BIL joint venture acquires corrugated box plants in Auckland, Hamilton, Napier and Shannon. It also gains a

carton plant in Auckland, and plastic film plants in Auckland and Christchurch.

Printpac has sales of about $2OO million a year, while the part of UEB going to the joint venture brings in about $l3O million.

Mr Whineray said the purchase strengthened access to markets and resources in the face of an over-all decline in the packaging industry. It was necessary to maintain investment in the expensive highly automated machinery needed to remain competitive. The deal also reflected CHH’s faith in the industry and Mr Whineray dismissed suggestions that it represented a change in investment policy. CHH’s executive chairman, Mr Richard Carter, has several times questioned the wisdom of investing in New Zealand export industries in the present economic climate.

“We at Carter Holt Harvey are always looking to and prepared to invest in good solid New Zealand activities and we see packaging in that light,” Mr Whineray said. Packaging was tied to the primary sector, covering the meat, fish, dairy and horticulture industries.

"When the day comes that that’s got no place on export markets then New Zealand turns the lights off,” Mr Whineray said.

“Those industries are a big part of our country and they are going to stay a big part.” He also rejected the idea that the move represented a growing closeness between BIL and CHH.

“We get on reasonably well. We don’t antagonise each other and we find them good people to work with,” Mr Whineray said.

“There’s certainly nothing you can infer that we’re getting closer together.”