employee numbers

Recycler Metal Man is making hay out of old car parts.

The Auckland-based company, which compresses and re-sells scrap metal, has 64 staff throughout New Zealand and an annual turnover of about $40 million.

Metal Man picked up several prizes at the recent Westpac Manukau Business Excellence Awards, winning the business of the year supreme award, and awards for excellence in manufacturing and exporting.

General manager Clark Proctor said the company's scrap metal came from a range of suppliers including boat builders, sheet-metal workers and automotive repair garages.

Metal Man exports about 50 per cent of its recycled metal, mainly to countries throughout Asia but also to Europe. The "top-grade furnace-ready" metal is used to make a variety of products, such as pots and pans, engine components and aluminium plates for boats.

Mr Proctor said the boom in scrap metal prices this year - they have risen by about 140 per cent - was "unbelievable", but not the windfall some might think. "I'm actually happy when prices are low. Because it doesn't promote thieving [of scrap metal], and removes those people from the fringes of the industry who are bad practitioners and rear their heads when prices are high."

Metal Man operates out of Auckland, Hamilton and Christchurch.

Norsewear confirmed at the weekend the brand has been sold, but the company said its socks will still be made in New Zealand.  Apparel Brands is the buyer. It is owned by Aucklander Ben Nathan, former owner of Barkers Men's Clothing. Management bought the six Norsewear stores, including the one at Norsewood.

Redundancies at the Norsewood and Wanganui factories are likely.  The company employs 22 people in the Wanganui factory and 27 at Norsewood.  The Norsewear factory is the dominant employer in Norsewood.

The company indicated it will communicate with staff early this week.  Workers first learned of the proposed sale through media reports on Tuesday. Norsewear released a statement yesterday, but refused to make further comment.  An unnamed "company spokesperson" said "intensive work" would continue on the future of the manufacturing plant in Wanganui and the factory in Norsewood.  "These are complex negotiations and it is likely to be some time before final decisions are made," the spokesman said.  "We appreciate our staff have concerns about the future of their employment. It is still likely there will be some redundancies and Norsewear wishes to assure all staff that they will receive all their entitlements in full."

Wanganui Mayor Michael Laws said his office had been in contact with Norsewear, seeking clarification on the future of the Wanganui plant and those employed there.  "This is a small but important business with skilled workers and of real value to the Wanganui economy."

Norsewear has promoted itself as a Kiwi icon. There was speculation this week that some production will be moved to China.  Mr Nathan registered a company called Norsewear Brands in July.

The future of clothing company Norsewear hangs in the balance, its owners saying they will decide this week whether to sell and sources saying the deal is already done and production may move to China.

The farming and ski wear clothing company celebrated its 40th birthday this year and has stressed in the past that it is a "Kiwi-made" company.  Norsewear exports clothing and many apparel companies, including Swanndri and Wellington-based Icebreaker, have already moved manufacturing overseas because of a high Kiwi dollar.

Norsewear director and managing director of Burleigh Evatt, the company's majority shareholder, Ian Fitzgerald said a final decision would be made this week but declined to comment further.  Sources said the company had been sold and plants in Wanganui and near Dannevirke might be closed and manufacturing moved to China.

Each factory employs about 30 staff.

A National Distribution Union official said it was told an announcement was due tomorrow.

The former owner of Barkers Men's Clothing, Ben Nathan, is understood to be the buyer.  Mr Nathan set up a company called Norsewear Brands in mid-July.

Graeme Hart has put Carter Holt Harvey's Wood Products business on the block in a deal that could rival the size of Telecom's $2.24 billion Yellow Pages sale.  Wood Products manufactures and markets wood-based building items including timber, plywood, laminated veneer lumber and interior decorative materials.

Market sources said yesterday that Mr Hart was seeking bidders for Wood Products in a sale being managed by investment banks First NZ Capital and Credit Suisse First Boston.  Wood Products has 12 manufacturing sites in New Zealand and six in Australia.  Its brands include Pinex, Laserframe, HyJoist, Bestwood, Ramsey Roundwood, Ecoply and StructaFlor.  The business is thought to produce annual earnings before interest, tax, depreciation and amortisation of about $300 million.

In the biggest New Zealand asset sale so far this year, Telecom sold directories business Yellow Pages to Hong Kong-based CCMP Capital Asia and Canada's Teachers' Private Capital for $2.24 billion in March.  Some sources felt Wood Products could fetch a similar price.

Big international private equity groups, possibly including Cerberus Capital Management, Pacific Equity Partners, CVC Asia Pacific and Champ, are thought to be the most likely bidders.  Mr Hart completed the $3.3 billion acquisition of Carter Holt Harvey in March 2006, delisting what was the stock exchange's third-biggest company.  Since then Mr Hart, whose fortune is conservatively estimated at $2.75 billion, has sold Carter Holt's forests to US timber management organisation Hancock Timber Resource Group for about $1.6 billion and properties including the company's Auckland base to Australia's Valad Property Group for more than $300 million.  He has also spent about $4.5 billion buying Swiss company SIG, Blue Ridge Paper Products of the US and packaging assets from US firm, and former Carter Holt parent, International Paper.  This has transformed Rank Group into the world's second-biggest drinks packager, behind Switzerland's Tetra Laval Group, with about a 15 per cent market share.

After buying Carter Holt at a time of weak international conditions for forestry companies, Mr Hart is looking to sell as the Agriculture and Forestry Ministry predicts 30 per cent growth in forestry export earnings to $4.65 billion in the next four years.

Carter Holt has about 10,000 staff and four other business units - Pulp & Paper, Packaging Carton, Packaging Corrugated and building products chain Carters.

Medical equipment maker Fisher & Paykel Healthcare, anticipating a continuation of 15 per cent to 20 per cent annual growth, is eyeing up overseas sites for manufacturing expansion.

Managing director Mike Daniell told yesterday's annual meeting in Auckland that F&P wanted to spread its geographic risk and cut costs.  If current growth rates continued, the company would reach capacity at its site in East Tamaki, Auckland, in about three years. It expects to continue doubling in size every four to five years.

F&P, which makes 99 per cent of its revenue overseas, plans to investigate potential locations in Asia, Mexico and Eastern Europe.  It was possible that a new building adjacent to its existing two in Auckland could be built concurrently with another overseas.

Risks that F&P wanted to mitigate included Auckland's location on a volcanic field and being able to find enough skilled staff.  "We employ nearly 1500 people now in our East Tamaki site. If we filled that site we could be employing as many as 6000 and that (number) could be difficult to find," Mr Daniell said.  "We're thinking ahead five, 10, 15 years in terms of staff."

F&P makes devices to treat obstructive sleep apnoea (a disorder that disrupts breathing during sleep), respiratory humidification products and patient warming and neonatal care products.  Because in some cases it was the sole supplier to hospitals, it needed to ensure ongoing supply "come what may", Mr Daniell said.

Being closer to major markets could cut freight costs and reduce exposure to the volatile New Zealand dollar.  Mr Daniell expects interim revenue to rise about 15 per cent, slightly less than last year, to between $US125 million ($NZ175 million) and $US130 million.

But, because of the Kiwi dollar's recent strength, in local currency terms interim revenue will be similar to 2006-07's $175 million.  He predicted interim operating profit of about $32 million, down from $46 million.  He reiterated May's forecast for 2007-08 annual operating profit of about $75 million, down from $89.6 million. However, yesterday's forecast was based on a US70c exchange rate whereas May's was based on US73c.

Macquarie Equities analyst Steve Hodgson said the Kiwi dollar returning to more normal levels, and the housing market weakening, was good news for F&P.  However, because of confusion over whether F&P increased or decreased earnings guidance in a currency adjusted sense, its shares slipped 2c to $3.39 yesterday.

Christchurch businessman Ken Anderson looks set to expand his Lane Walker Rudkin clothing manufacturing empire.

His takeover of Auckland textile manufacturer Pod is almost home and hosed. Anderson had secured 87 per cent of Pod shares by yesterday with only 3% left to reach the 90% threshold at which he can compulsorily acquire the rest of the shares. A key shareholder with 6.4%, Aucklander Hemat Lal Patel, who had considered the bid too low, told the New Zealand Exchange (NZX) yesterday he had sold to Lane Walker Rudkin.

Anderson, an accountant by training and chairman and chief executive of Lane Walker Rudkin Industries, has a week more up his sleeve with the 50c-a-share Pod takeover offer deadline next Thursday.

Anderson owned LWR and there were no other shareholders, he confirmed. He bought LWR in 2001 except for the Canterbury brand. He keeps a low profile and will only say the LWR business has a turnover of several hundred million dollars. Pod will add about another $65 million in sales and about 250 staff.

LWR Manufacturing has more than 1000 staff in New Zealand and Australia. About 600 staff are in Christchurch at LWR's site in Sydenham where it has a textile manufacturing and hosiery and underwear making plants. LWR manufactures hosiery and underwear for other companies including Pacific Brands.

LWR has two sock factories, one in Timaru and one in Melbourne, and three smaller hosiery and underwear factories in the central North Island, one in Greytown (135 employees), Levin (130) and Pahiatua (25).

In Brisbane, LWR owns a sport apparel factory which makes sports team uniforms under licence for Adidas. It also owns the Stirling Sports and Champions of the World sports clothing retail chains. He said he was confident of reaching 90% in the next week, because of indications from other shareholders that they would sell.

Since buying LWR six years ago when it had about 400 staff, he had about doubled the business. About 60% of sales are in New Zealand, 30% in Australia and about 10% in the United States and other countries, Anderson said. In its heyday the company employed about 4000 staff, he said.

Pod would add more scale to the business. Savings existed in delisting Pod and in product rationalisation, he said. "There's a lot to be said for manufacturing close to the market," he said. About 90% of the firm's sales are from Australasia.

Fisher & Paykel workers have been warned there could be more job losses after yesterday's shock announcement that 350 staff would be axed and washing machine production moved to Thailand.

Workers at the company's East Tamaki plant eagerly filed into a meeting yesterday expecting to be given a bonus. Instead they were told the bad news. "The mouths just dropped," said one employee.

After delivering the news, Chief executive John Bongard said there were no guarantees that more production lines would not be shifted abroad. "So I can't stand up in front of you today ... and say, 'That's it', because I'd be lying to you," he said.

Today he ruled out another closure before the end of the year, but could not say if jobs would be safe from next year.

Green Party economic development and employment spokesperson Sue Bradford said today: "Fisher & Paykel is seen as an iconic NZ manufacturing company. "I am therefore very disturbed not only to hear today's announcement of 350 job losses, but also the statement of F&P managing director John Bongard when he says there are no guarantees the rest of the company's manufacturing jobs won't one day also be moved offshore.''

Overtime

Workers, who would not be named for fear it would hurt their future employment, said they had been doing overtime every week to meet targets. Fisher & Paykel blamed the move on competition, the loss of a duty preference and a "crippling" environment at home.

The announcement came just hours after the Reserve Bank raised the cash rate by another 0.25 per cent in a move that is expected to push the New Zealand dollar up and put further pressure on exporters.

Bongard said production of washing machines and clothes dryers would be moved from Auckland to Thailand, costing about 350 people their jobs. The business environment in New Zealand had deteriorated, thanks to high interest and exchange rates and some policies on trade and tariffs, Mr Bongard said. "Exchange rates and high interest rates [are] crippling the whole productive sector in New Zealand in my view."

Margins in the washing machine business had suffered considerably over the past four to five years. Most of Fisher & Paykel's competitors supplied the Australasian market from low-cost Asian countries, he said

"Without this relocation to Thailand our continued future in laundry design and manufacture would be doubtful."

Plans by a competitor to move its production out of Australia would also cost the firm a 5 per cent duty preference under the Closer Economic Relations trade agreement. "I guess the loss of the CER duty preference into Australia early next year was kind of the straw that broke the camel's back," Mr Bongard said.

Free-trade agreements with countries such as India, China and Thailand being sought by the Government were also unhelpful to the manufacturing sector, he added.

The relocation to a purpose-built factory in Thailand would take a year and result in annual pre-tax savings of up to $15 million. At present the company has a global workforce of more than 4000 people, with about 2100 in New Zealand (1600 in Auckland).

The company also has operations in Italy, the US and Australia. More than 80 per cent of its sales revenue is generated overseas. Engineers' union secretary Andrew Little said F&P's margins had been squeezed by the high New Zealand dollar, adding, "This has got to be a wake-up call for the Government".

Australasian food giant Goodman Fielder is restructuring its New Zealand division, a move which has prompted the resignation of local managing director Alison Taylor.

The listed company's dairy and baking businesses in New Zealand will now operate as individual business units rather than as part of a larger GF Fresh New Zealand division.

Taylor will leave next month.  There were no plans for downsizing, job cuts or other changes, a Goodman Fielder spokesman said.

"I'm sure there'll be gains but savings isn't the issue, it's a matter of providing focus to the business."  Taylor had the option of staying, he said.  "But she's chosen to go, which is fair enough because her job's a bit smaller now than what it was."

The purpose of the restructuring was to improve the performance of both businesses "particularly the dairy business, and to that end, they've appointed a specialist in that area", the spokesman said.

David Glik - currently group executive, marketing and innovation at National Foods - will become managing director of Goodman Fielder's New Zealand Fresh Dairy division.  Phil Hand has been appointed managing director of the Fresh Baking New Zealand division and will report to GF Fresh Baking managing director Gordon Hardie.

In November the company said it expected to meet its forecast earnings and dividend for the year despite expecting difficult trading conditions in the last part of the year.

Last week Goodman Fielder confirmed it would pay the full acquisition price of $869.59 million for New Zealand Dairy Foods Holdings, which had achieved revenue targets since the deal was announced.

The company's share price closed unchanged at $2.58 yesterday. It has risen 9c since the start of the year.

Goodman Fielder was delisted in 2003 when Graeme Hart vehicle Burns Philp executed a A$2.25 billion ($2.54 billion) takeover.  The business, plus dairy assets belonging to Hart's Rank company, was relisted in December, 2005 ,by Burns Philp with a value of A$2.65 billion and raising A$2.12 billion.

Hart bought into Burns Philp in 1997 and in November was successful in his bid to take full control of the company - gaining access to its $2.9 billion in cash, Blue Bird Foods and a 20 per cent stake in Goodman Fielder.

GOODMAN FIELDER
* More than 6000 employees across Australia and New Zealand.
* Brands include Vogel's, Freya's, Meadow Fresh, Tararua and Kiwi Bacon.
* Products delivered to more than 29,000 outlets every day.
* Graeme Hart still owns a 20 per cent stake.

Christchurch's Anderson family -- owners of Lane Walker Rudkin (LWR) -- plan to expand the separately run Stirling Sports franchise, after quick success with its first megastore. The "big-box" format for the Stirling store at Tower Junction in Christchurch -- twice the size of existing stores -- would be followed at other sites around the country, LWR general manager Mark Anderson said.

The 600sqm Tower Junction store opened last weekend. "We've had really rave reviews from everyone who has been through it ... we had the Canterbury Rams through we had the All Blacks in there signing items, and we're very pleased with the trade," he said.

There were 31 stores in the franchise-based group, including two new franchisee-owned stores in Auckland's Sylvia Park and Queensgate, in Wellington, and they had recently poached Simon Pratley from rival Rebel in a management role. "There have been seven stores in the group refitted to the new (design) format. We'll have the balance of the group fitted in the next 12 to 18 months. "(Expansionwise) we're thinking 30 mall sites, and about a dozen big boxes over the next two to three years."

LWR -- the nation's largest textile firm -- recently has started a merino clothing brand, Everest, to tackle such firms as Kathmandu and Icebreaker. The brand was going well, and was being carried in Australia's David Jones stores and a giant New York store Paragon Sports, plus Ballantynes and other South Island boutique stores, he said. Everest cashes in on the company's connection to Sir Edmund Hillary's 1953 ascent of the world's highest mountain.

LWR, with 1200 employees and approaching $200 million of annual revenues, also makes a large amount of clothing for a range of clients, with expectations of some key contracts. In Australia, LWR has contracts to manufacture teamwear for rugby league clubs and school sides on behalf of brands including Adidas.