Aust plan biffed, NZ given nod

By LIBBY MIDDLEBROOK

Auckland company Ullrich Aluminium has scrapped plans to build a manufacturing plant in Australia in favour of expanding its New Zealand operation.

The company will invest up to $15 million during the next six months to double the size of its Hamilton aluminium extrusion plant as well as boosting its distribution network.

Last year, the company proposed to build a new plant in Australia, but managing director Gilbert Ullrich said plans changed following the outcome of the election last year.

"We would have put it in Australia if there hadn't been a change of Government.

"I'm convinced New Zealand's got a better future now and I'm convinced that our company should invest here."

The $10 million expansion of the Hamilton plant, which will include a new extrusion press and three buildings, will create up to 50 jobs over the next six months.

Construction on the 4ha property, which is expected to be completed by July, is subject to resource consent approval.

Ullrich Aluminium also plans to increase the number of distribution warehouses in New Zealand from 14 to 16 to cope with the increase in production, which is largely bound for Australia.

"With the new Government there will be more building projects around, more contracts for things like hospitals that will take a lot of aluminium.

"The old Government wasn't promoting industry and exporting and I believe the new Government will be doing something about it.

"The whole philosophy will change here," he said.

"I'm prepared to be faithful at this stage. We are 100 per cent committed to manufacturing in New Zealand."

Ullrich Aluminium, which employs about 300 and exports to more than 25 countries, also has two processing facilities in Auckland.

While the company develops its expansion plans, prices for raw aluminium material are at a 13-month high.

Mr Ullrich said the country's aluminium processers were not able to recover the increased cost of buying raw products by onselling added-value aluminium products.

However, he said prices for raw aluminium were not sustainable as countries such as Russia and China stepped up production and flooded export markets to gain short-term higher returns.

"It's a supply and demand thing. They may get returns in the short term but prices will come back because of more competition."

Meanwhile, Australian energy and building supplies company Boral is reviewing its 35-year-old New Zealand operation.

The company, which has four businesses in New Zealand, is considering closing or selling three of them as part of global restructuring to split its energy and building/construction operations into two new listed firms.

Merchant bank Grant Samuel & Associates has been appointed to evaluate Boral Lineals, an aluminium distributor, Boral Acrow, a scaffolding manufacturer, and Showermaster, which makes shower products. Boral does not intend to divest its fourth New Zealand business, Midland Bricks.

Boral NZ managing director Jim Hillary said the company was in discussions with a number of interested buyers.

The future remains uncertain for the company's 175 New Zealand employees.