Toll NZ looking at new acquistions

Mark Rowsthorn

Toll Holdings of Australia is close to making another acquisition in New Zealand.

"We're looking at a number of acquisitions at the moment," said Toll NZ chairman Mark Rowsthorn.

One was reasonably close.

Speaking after the annual meeting in Auckland yesterday, Rowsthorn said the acquisitions would be "bolt-ons" to Toll's purchase of 84.2 per cent of road, rail and shipping operator Tranz Rail a year ago and were most likely to be in the warehousing or road transport area.

Toll NZ also disclosed more about expansion plans for the rail engineering business it acquired with Tranz Rail, now renamed Toll NZ.

The company has already said it is considering assembling locomotives locally because it will be cheaper than buying them and because the lead time for orders on rail equipment globally is long and getting longer.

The company is now considering building a new rail workshop here.

Toll NZ chief executive David Jackson said the idea was in the early stages. The company wanted to build a rail-engineering business here that could service Australasia.

"We're keen to talk to the Government about establishing a training programme for New Zealanders," said Jackson.

Toll had already raised the issue with Finance Minister Michael Cullen.

Jackson said the company had added 100 staff to its Hillside workshop in Dunedin, taking the total to 270. It wanted to put a second shift on at the workshop.

It had orders for 33 new coal wagons for Genesis Energy, 25 wagons for Solid Energy and passenger cars for Auckland Regional Council and was tendering for work on carriages on the Wairarapa service for Wellington Regional Council.

A former Tranz Rail workshop in Lower Hutt is run by Alstom, the company Tranz Rail outsourced engineering work to before Toll Holdings took over.

Alstom is selling its assets in Australasia and, in New Zealand, it has to consult Toll NZ. Jackson said Toll NZ was renegotiating the Alstom contract to promote better performance and reward drivers. This might facilitate a sale by Alstom.

Train drivers and engineers to service the rail industry are in short supply worldwide.

Australian companies, including Pacific National, which is half-owned by Toll Holdings, have been raiding the local market.

Jackson said some would come back here because much of the work in Australia was in isolated mining regions.

All this commentary came after one of the quietest annual meetings of the year.

Toll NZ has about 2000 shareholders after Toll Holdings failed to get 100 per cent of the company last year and delist it.

Yesterday, about 40 turned up to reappoint two directors, approve the auditors' pay and adopt a new constitution. It took 25 minutes.

Rowsthorn said trading since June had been in line with expectations and company restructuring was continuing.

"Economic conditions remain solid in New Zealand and the economy has generally absorbed interest rate increases without signs of a major slowdown."

KIWI BUSINESSES

* Toll Rail: Longhaul movement of bulk commodities and containers by rail.

* Toll Tranz Link: Logistics arm incorporating road transport fleet.

* The Interisland Line: Cook Strait ferries.

* Tranz Metro: Urban passenger service.

* Hillside: Engineering services.

* Tranz Scenic: Long-distance passenger service.