Monday, 12 October 2015 07:00

Skellerup’s international sales up

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Skellerup, the makers of Red Bands, are doing well in the international market. Skellerup, the makers of Red Bands, are doing well in the international market.

Agriculture product sales growth in US, China and South America enabled Skellerup to increase its agri division earnings despite the slightly softer New Zealand market, says chair Sir Selwyn Cushing.

Skellerup Holdings made $21.9m after-tax profit in the last financial year; NZ, Australia and North America generated about 25% of the revenue, followed by Europe then Asia. The agri division which makes dairy rubberware, animal hygiene products and technical footwear recorded pre-tax earnings of $22.1m, up by 2% on flat revenue of $80.5m.

"Our focus on international markets enabled the agri division to record an increase in earnings and overcome the impact of a reduced contribution from a NZ market buffeted by lower dairy pay-outs," says Cushing in the annual report.

"Significant growth was achieved in the US, China and South America. Although results in NZ were slightly softer than in the prior year, sales of dairy rubberware during the winter peak, when much of the onfarm and shed maintenance work is done, were relatively solid."

Cushing says the demand for protein remains a key driver of the global dairy industry and that demand should continue for the medium term.

"While world prices for dairy commodities remain volatile and are presently below the levels of recent years, long-term prospects for the industry are good," he
says. "US milk production continues to increase, as does the demand for dairy products in developing countries."

He says deregulation in the dairy market in Europe and the inevitable removal of the sanctions on Russia will provide new opportunities for growth. Many countries in South America are continuing to develop their dairy capability also.

Cushing says a highlight of the year is the excellent progress being made at its new Wigram plant; $15m has been spent on the project this year and $25m more is earmarked to complete the construction and fitout.

"As shareholders will appreciate, our Woolston factory has been the cornerstone of our agri division for some 75 years. The new facility sets us up to stay at the forefront of dairying best practice for the next 75 years and beyond."

Agri division general manager Guy Keogh says with the new dairy rubberware development and manufacturing facility being built at Wigram they had the opportunity to lay out the ideal design. "Our business has changed significantly over that time and, while we've continued to manipulate and adapt the current site for our needs, a purpose-built facility is going to provide opportunities that will benefit customers and staff."

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