Optimism looming at Feltex

By SIMON COLLINS and MATHEW DEARNALEY

Feltex is "highly likely" to buy a new $2 million loom for its Christchurch carpet mill, in one of the first signs of cautious expansion thanks to New Zealand's sliding dollar.

Chief executive Chris Davis said yesterday that the investment would boost the mill's output by about 40 per cent, or between $4 million and $5 million a year, but would create fewer than 20 new jobs.

He said the company could not meet the increased demand for its woven woollen carpets caused by the booming United States market and the cheap kiwi dollar.

"We have a certain level of equipment. It's fully booked out until March 2001," he said. "We are already working 24 hours a day, seven days a week."

Although the expansion still needed board approval, Mr Davis said, "The decision is made."

It will take 15 to 18 months to order the machine from Britain and install it. Mr Davis said the volatile exchange rate since 1985 made it hard to plan far ahead.

"When that loom is here and committed, what's the market like?" he said. "If it's still good, we could continue [to expand].

"There is no doubt in our minds that there is more ability to sell [but] ... we are more inclined to say, 'Let's be conservative and look at one at a time'."