F & P shuts down circuit board plant

By Yoke Har Lee

Fisher and Paykel is exiting the printed circuit board business, moving towards sourcing much cheaper boards from Asia for its whiteware and healthcare products.

On August 31 the company will close the shutters on its circuit board manufacturing unit Screencraft Manufacturing in Onehunga which employs 90 people. About half would be retained within F&P, the rest will go by attrition.

"Asian printed circuit board manufacturers now sell the same typical printed circuit board for half Screencraft's selling price with excellent quality and delivery times," F&P chief executive Gary Paykel said. "All signs indicate that this pricing is a continuing trend. F&P has a responsibility to minimise its own input costs so that its whiteware and healthcare products stay internationally competitive."

He said despite Screencraft having developed processes and standards equal to the best in the world, the efforts were ineffective compared to the scale available to international competitors.

Costs relating to the closure, which will include the write-down of plant and equipment, and redundancy payments, will be covered in provisions in F&P's annual result for the financial year ended March 31, 1999.

"F&P expect to sell Screencraft's assets, but in the highly unlikely event of no asset sales being made, the payback for the closedown costs for F&P will be approximately two years," Mr Paykel said.

Industry watchers said New Zealand has no economies of scale in supporting a printed circuit board manufacturing industry. One industry official said: "F&P managed to get flexibility, in making its products on time, rather than having real cost efficiencies from Screencraft."

Of the circuit board manufacturers still around, those that manage to survive have done so doing short runs or prototype runs.

Screencraft was set up as a joint venture in 1970 between television assemblers and F&P to make boards for the TV assembly industry. F&P took full ownership of Screencraft when that industry ceased. In 1993, the selling price of a circuit board was $760 per sq m. F&P now sells the same board for $230 per sq m.