By Chris Nicholls

AUCKLAND: Fisher & Paykel today announced it will close the Dunedin, Brisbane and DCS California manufacturing plants and relocate to existing sites in Italy, Thailand and their newly purchased Reynosa, Mexico plant, as part of a new global manufacturing strategy.

The announcement, made this morning to the ASX, will see all three factories close within the next 12-18 months, with the loss of approximately 430 jobs at Dunedin, approximately 310 at Brisbane and approximately 330 positions at the DCS California plant.

The closure of F&P’s Brisbane manufacturing facility marks the end of the New Zealand company’s manufacturing presence in Australia.

Fisher & Paykel said the Dunedin closure decision had been taken after consulting the Engineering, Printing and Manufacturing Union of New Zealand.

Fisher & Paykel’s existing Auckland refrigeration plant, Ohio, USA laundry plant and Borso del Grappa, Italy plant will continue to operate as normal.

Fisher & Paykel said the move would save the company $50 million per annum, after a one-off cost of another $50 million, both at a pre-tax level. Capital expenditure was estimated to be $100 million, which the company said would be “substantially offset” by the sale of the factories it will close. The sale is expected to bring approximately $100 million.

Fisher & Paykel chief executive officer and managing director, John Bongard, cited increasing manufacturing costs in both Australia and New Zealand as the reason for the closures.

“We’ve been faced for many years with an extremely unhelpful exchange rate, fuelled by high interest rates. Increasingly complex and costly compliance costs of manufacturing in our home countries have not assisted.

“On top of these factors, free trade agreements with low cost labour countries like China and Thailand have created a playing field we are unable to compete in,” said Bongard.

“This is a very emotional day for the company. We have been a substantial manufacturer in New Zealand for almost 70 years and a producer in Australia for nearly 20 years. Everyone at Fisher & Paykel prides themselves on the culture the company has developed and we operate within very close family values.

“It is with real regret that we are forced to make these relocation announcements, even though they are commercial imperatives for the business. The obligation we have to the company and our shareholders to ensure ongoing security of their investment and to deliver a significantly improved performance compels us to go forward with these decisions,” said Bongard.

Further information will be available after midday, when Fisher & Paykel will hold an official press conference to discuss the decisions.