KEY POINTS:
Ron Cave, managing director of manufacturer Tubepack, has sacrificed his own wages, but it's not enough to stop the US exchange rate threatening the viability of the business.
The Auckland company, which makes plastic tubes and containers for the cosmetics and personal care industry, made 47 employees redundant last month from its 120-strong workforce, blaming the strong dollar and growing competition in Australian and Chinese markets.
About 10 per cent of Tubepack's sales were exported to the US, and many other markets use the US dollar as their main currency for international trade.
'It's pretty grim," Cave said. "We have spent a lot of money establishing a worthwhile business in the US and we still have contracts there but all profitability's gone from them."
US sales, previously nearly $2 million, would be lucky to hit $600,000 this year.
"We go back and say we've got to put the prices up because the exchange rate is just killing us and they're not really interested. If you can't do it, someone else can, they say."
US sales were important because they helped to keep the plant running near full capacity, he said.
The company was still strong in New Zealand and Australia, although retail sales across the Tasman appeared to be declining in the face of housing costs.
"We've continued to manufacture, we have sacrificed profits, my partner and I have sacrificed our own incomes from the company in order to keep it as viable as we can, as long as we can, but it reaches a point where you can't go any further. It [the exchange rate] certainly impacts on the viability of the business."
