F&P in $7m plan for new factory

By ELLEN READ manufacturing writer

Fisher & Paykel Appliances will spend $7 million on a new factory at its East Tamaki site, expanding production to meet demand from strong sales and new products.

The announcement came at the company's packed annual meeting yesterday and followed news of a global alliance with the world's biggest home appliance maker, Whirlpool.

The firms would share ideas and resources on a case-by-case basis, said chief executive John Bongard.

The good news pushed the company's shares to a record $14.36, although they settled a little to end the day at $14.20, their highest closing price and a gain of 30c on Friday.

Bongard told shareholders that Auckland factory space was at a premium as laundry and refrigeration sales continued to increase and more electronic modules were needed across all production lines.

"With these increases and Smartload dryer due for introduction this year ... we have decided to build a new manufacturing facility," he said. The company's pressed metal operation would also be relocated to the East Tamaki site.

The expansion would mean more jobs down the line, but how many and when were not known.

Bongard said the Whirlpool alliance would give F&P Appliances greater global market access through Whirlpool's extensive distribution system.

"Whirlpool also offers us the benefits of global purchasing power and the strength of its global technology development organisation," he said.

The agreement does not involve Whirlpool taking a stake in the New Zealand manufacturer.

Regulatory requirements and commercial sensitivity prevented Bongard from giving many details but he did say the tie-up was a medium to long-term prospect rather than something which would show up on this year's balance sheet.

F&P Appliances already has an agreement with the European division of Whirlpool for it to distribute the "dishdrawer" dishwasher.

Whirlpool's president and chief operating officer, Jeff Fettig, said of the agreement: "Initially, the alliance will focus on global sourcing of major home appliances, as well as the sharing and co-development of product technology."

Whirlpool has annual sales of over more than US$11 billion ($18.7 billion), 68,000 employees and nearly 50 manufacturing and technology research centres around the world. It sells products in more than 170 countries.

Completing the good news picture, F&P Appliances shareholders were told that their company expected to post a full-year profit similar to last year's $73.5 million.

Bongard said the company expected news from Australia soon on an inquiry into the dumping of washing Machines there by Korean manufacturers.

Chairman Gary Paykel said the core business remained in refrigeration and laundry products but noted good growth in the dishwashing and cookware sectors as New Zealand and Australian market shares grew and exports increased to the United States and Europe.