Fletcher's Laminex exits Southland MDF plant
Friday 8 Jun 2018Fletcher Building's Laminex NZ unit has exited a 10-year investment in a Southland medium density fibreboard plant with Tokyo Stock Exchange-listed Daiken getting clearance to buy the 124ha site at Mataura, Southland in New Zealand.
Daiken convinced the Overseas Investment Office with a plan to increase capacity at the facility, which was likely to increase New Zealand's exports and drive up demand for pulp logs. Daiken has an existing MDF plant in Rangiora, north of Christchurch. It has acquired Dongwha New Zealand from South Korea's Dongwha International and Laminex, gaining its Patinna subsidiary that owns the Southland site.
The sale price was withheld, however, last September, the Nikkei Asian Review reported that the deal was thought to be worth about 10 billion yen (US$89.7 million). Daiken already has production centres in New Zealand and Malaysia and is hoping to expand operations through Dongwha's sales networks in Oceania and North America, the Review wrote at the time.
Alongside the release of the OIO decision, Daiken released Dongwha NZ's 2017 report, providing a snapshot of returns at the Southland plant. It made sales of $87.6 million in calendar 2017, up from $91.6 million the previous year but costs ate up most of the gains and net profit actually fell to $4.8 million from $7.7 million.
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