F&P mulls more outsourcing of Mosgiel processes to Asia

John Bongard

Fisher & Paykel Appliances is reviewing some of its Mosgiel plant's plastic injection moulding manufacturing for potential replacement from Asian factories.

No decision is due on the outsourcing issue for about three months and any Mosgiel staff affected would probably be offered alternative positions where possible, vice-president of investor relations Paul Brockett said yesterday.

He confirmed the company was reviewing the manufacture of its smaller injection moulded components at Mosgiel and considering sourcing from an unnamed Asian country but it was unlikely the components from the plant's five largest moulding machines would be sought overseas.

"It doesn't make sense shipping large components back to New Zealand. However, smaller components may be viable," he said.

Chief executive John Bongard said in May that the volatility in the New Zealand dollar and see-sawing raw material costs had prompted in-house cost-cutting, restructuring and outsourcing of components from China, measures which had all contributed strongly to the year's profit.

A Mosgiel employee said up to 60 staff working on the plastic injection moulding line were becoming increasingly frustrated and concerned by the review and how it may affect them.

Brockett said all aspects of Appliances' manufacturing plants were open to review if it meant cheaper components were available locally or overseas.

Appliances' sales surpassed $1 billion for the first time during the past year to March but its after-tax profit was down 6.7 per cent from last year's $68.5 million to $63.9 million - slightly above guidance expectations.

In mid-June Appliances announced the $158 million purchase of an Italian manufacturing plant, the cookware division of De'Longhi, and said the Mosgiel plant could be in for a production boost of its DishDrawer product for the expanding European market.

- OTAGO DAILY TIMES