Nuplex Targets Technology Leadership
October 28, 2005
Nuplex Targets Technology Leadership And Earnings Growth
Statement based on the addresses given by the Chairman, Fred Holland, and Managing Director, John Hirst, at today's annual meeting of Nuplex Industries Limited held in Auckland.
Nuplex Industries is on track to achieve its objective of being a "genuine global supplier" of coating resin, and to lift earnings per share before amortisation to "market expectations of 48 cents a share".
At today's annual meeting of the New Zealand headquartered, trans national company, held in Auckland, Chairman Fred Holland said that the acquisition of the Coatings Resin business of Akzo Noble during the past financial year for $208 million had overcome the twin threats Nuplex faced in the form of lack of international technology leadership and over reliance on the Australasian market.
"The acquisition brought world-class research and development into the group, removing our reliance on being able to license the technology of others," said Mr Holland.
"The volume of business the acquisition added, when combined with that of Nuplex, also created the critical mass necessary to fund the R&D expenditure we consider necessary to met our future development needs."
Mr Holland said that in addition to operations in Europe and the Americas, the Coatings Resin acquisition increased Nuplex's access to markets in Malaysia, Indonesia, Thailand and China.
He said raw material pricing in the company's key resin business remained at higher than normal levels, but margins and demand for products was recovering.
This gave the company the expectation and confidence that it would grow earnings per share in the current financial year.
Managing Director John Hirst told shareholders that with resins representing 77% of total sales this business sector was the key to the company's ongoing success.
"After a slow start to the new financial year, our international resins business has gathered momentum and is operating close to expectations," he said.
"It is forecast to continue on these lines for the balance of the year."
Mr Hirst said the implementation of Nuplex's "proven acquisition integration strategy" had enabled the company to "utilize the entire intellectual capital of the group" in shaping the future of the company.
He said there had been no "massive restructuring, huge numbers of people being unsettled or historical reporting lines being torn apart".
Mr Hirst said that the international resins market continued to undergo significant change through mergers and the "spinning off" of resin divisions by global paint manufacturers.
"These will represent opportunities for us to build out international position from what is already a significant base."
He said that Nuplex would in future invest its resources in those market segments in which the company could be "in the top three internationally"
In those markets where it is the preferred supplier but where resources make it unable to achieve technology leadership, he said Nuplex would ensure it had "fast follower capability" to provide customers with a viable alternative.
"There is nothing new in this strategy. It is one that has built Nuplex over almost 50 years."