F&P Appliances to shift production to the US

Fisher & Paykel Appliances today announced plans to shift production of its SmartLoad Dryers from Auckland to the United States.

The move puts 65 jobs on the line at the company's East Tamaki plant, although F&P Appliances hopes to redeploy staff and lessen the impact of redundancy through "natural attrition".

"While we never like seeing jobs disappear from New Zealand we also have to think of the long-term interests of the business," chief executive John Bongard said.

"Anyone involved in exporting right now is finding it tough, but this is not all about currency it is also about saving on-going costs."

The top loading large capacity dryers were designed specifically for the US market, where F&P Appliances sells over 95 per cent of the dryers currently produced at its East Tamaki plant.

Plant and equipment will be relocated to F&P Appliances' new factory in Clyde, Ohio, over the northern summer, with production expected to begin late next year.

The move follows a decision in July to shift production of its Smart Drive washing machines, currently located in Cleveland, Australia, and a motor manufacturing line, located in Auckland, to Clyde.

"Like the washers, these dryers are large and give us the same opportunity to save costs of working capital and freight," Mr Bongard said.

"Placing the production closer to our largest customer base for them makes good business sense."

The company expects to book a reduction in working capital of about $8 million and an earnings improvement (at earnings before interest and tax level) of about $2.5 million per annum once the plant is fully operational.

Recent growth in sales in the US means this market is now the major revenue generator for the company.

F&P Appliances also has a production line in Huntington Beach, California, where it manufactures indoor and outdoor cooking products.

Shares in F&P Appliances rose 3c to $3.20 on the news.

- NZPA