Nuplex Industries will close four factories in Australia and New Zealand in the next two years as the trading outlook dims, eliminating jobs in a restructuring effort that will slice $17 million from forecast 2013 profit. The stock dropped about 6 per cent.
Nuplex will shut factories at Onehunga and its high-temperature plant at Penrose in Auckland, Canning Vale in Western Australia and Wangaratta in Victoria after an eight-month review of its operations and markets, the company said in a statement to the NZX today.
It didn't quantify job losses though redundancy costs would be $3.95 million, it said. Other costs would be $8.05 million to write down obsolete equipment and clean-up and site remediation of about $4.35 million. At the same time it will spend about $13 million upgrading plants at Botany, New South Wales, and Wacol, Queensland. It will also write down the carrying value of its RPC Pipe Systems venture, previously called Fibrelogic, by $5.6 million.
"It is likely that demand levels in both the manufacturing and construction sectors will be lower than in previous economic cycles as manufacturing customers and their customers continue to move offshore due to the impact of the ongoing strength of the Australian and New Zealand currencies," said chief executive Emery Severin.
"In construction, whilst activity will recover at some point, demand conditions remain subdued," he said.