It has been widely reported in the Antipodean press today that home appliance maker Fisher & Paykel have lost 5.1 percent to NZ$3.90. The company has also warned at its annual general meeting that net profit for its 2007 year is likely to be at the lower end of its NZ$75 million to NZ$80 million forecast due to high raw materials costs and increased competition in key markets.
F&P also announced that it was cutting 41 New Zealand jobs this financial year as production and procurement is transferred to the US and China.
Chief executive John Bongard said the job losses were inevitable and merely a part of reviewing the company’s activities and offsetting high raw material prices.
He said more job losses would come, but could not offer a number for how many.
“As we review all parts of our business and look at restructuring, was going to be inevitable,” he said, “Unfortunately it’s one of those progressive things.”
Mr Bongard said there was growing opportunity to purchase plastic componentry in low cost countries like China.
“We see China as a shopping warehouse where we can purchase good quality components considerably cheaper than we can either make them ourselves, or purchase locally.”
An F&P procurement office in China is expected to open later this year.
Mr Bongard said the new office accounted for some of the jobs losses, but there was also the transfer of production lines from New Zealand to its new manufacturing plant in Ohio, United States.
F&P chairman Gary Paykel said there was still some uncertainty in the appliances business, but the in-house cost-reduction would go some way towards countering the uncertainties. Mr Paykel said the past year had seen unprecedented economic conditions, contributing to a 6.7 per cent drop in after-tax profitability of $63.9 million compared with $68.6m the previous year.
Prices for raw materials such as steel and oil-based plastics remained at record highs.
The purchase in June of Italian cookware manufacturer Elba is expected to give F&P access to new distributors and retailers in Europe.
The anticipated new range includes the Luna gas cooktop, considered a world-first, which is due to be released early next year. The hob of the new cooker features trivets and a gas burner that rises and lowers through the glass cooktop.
F&P also intend to release a new automatic ice and water-providing refrigerator and a new water efficient top loading washing machine also soon be on the market.