LWR not moving plant to Asia

Press, 27 February 1989, Page 29

LWR not moving plant to Asia

The managing director of Lane Walker Rudkin Industries, Ltd, Mr David Lee, says the report of the company’s interim results, printed on these pages on Saturday, strayed into several “seriously misleading inaccuracies.” “The company was very pleased in the current business climate to be able to announce an 81 per cent increase in total profits, which is due in no small measure to the efforts of both management and the large workforce we employ,” said Mr Lee. The reporter concerned accepts the points made by Mr Lee.

“We are concerned that the significance of the results achieved has been overshadowed in ‘The Press’ article by the reporting of a planned expansion into Singapore by way of acquisition of ‘an existing clothing company’,” Mr Lee said. “This is misleading and incorrect,” said Mr Lee. “The last thing we need is a clothing plant in Singapore.” Lane Walker Rudkin is interested in the Asian region, Mr Lee confirmed, but he emphasised that this would be in the dyeing and finishing area where the company has particular skills. “Any such currently contemplated expansion would not be at the expense of the company’s

domestic activities. “We are planning to broaden our over-all operational base which is a prudent policy that will present additional opportunities for many of our employees.” The report on Saturday that a free market currently existed between Australia and New Zealand and that there was only a 30 per cent tariff on imports sourced from Asia, was incorrect, said Mr Lee.

“The actual position is that there is not a free transtasman market in apparel as it continues to be controlled by both quota and tariff,” said Mr Lee. “From July, 1989, some free access will be permitted for Australian imports into New Zealand until completely freed up in 1990.

"Furthermore, a 30 per cent tariff on imports sourced from Asia will not be introduced until 1992 and LWR continues to oppose this.” The Saturday article commented that the new LWR Apparel Design and Marketing, set up to be responsible for handling “all clothing brands,” could "source brands” if so desired.

This also requires clarification, said Mr Lee. “LWR Apparel Design and Marketing handles all outerwear brands except Canterbury International’s

‘3Cs’ brand. The report has blurred the strategy of the new structure which is to allow increased flexibility in sourcing product and raw material, not brands.

“We own our own brands and wouldn’t be interested in sourcing outside brands.” Mr Lee said he found the statement that the clothing industry was traditionally capital-inten-sive to be extraordinary. In fact, it had always been regarded as labour intensive. However, LWR had made significant progress in the area of automation and improved productivity. “LWR has of course slimmed down in staff numbers over recent years. However, we continue to employ some 2000 people and their dedicated effort, coupled with greater efficiency from the new technology we now have available, has been a winning combination.

“That is clearly evident in the improvement achieved in profitability, and in our balance-sheet strength, and measured against the gloomy list of losses by other public companies this year, LWR would have considered that more newsworthy at this time than what will essentially be a modest expansion overseas,” said Mr Lee.