KEY POINTS:
Taking over your new boss' old job can be a challenge.
But David Worley does not see his appointment as a harbinger of the future and an immediate step into the Fletcher Building chief executive role.
Last September, Worley, aged 54 and originally from Whangarei, was appointed to
run the Australian-based Laminex Group, one of NZX-listed Fletcher's five giant divisions.
Worley took over Laminex from Australian Jonathan Ling who was catapulted into the top spot as Fletcher's chief executive, following the departure of former CEO Ralph Waters. Worley had been running Fletcher's distribution division, which owns retailer PlaceMakers, and been with the company four years by the time he was appointed to Laminex.
His main challenge now is to push up bottom-line earnings at a time when the immediate future of the residential construction sector is uncertain in New Zealand and Australia's biggest market, New South Wales.
"Sales are particularly strong in Australia, less so in New Zealand," Worley said.
His focus remains on construction booms in Western Australia and Queensland where he said Laminex was performing well.
With sales revenue of $1.027 billion in the year to June 2006, Laminex, whose HQ is in Melbourne, is the Australasian leader in its field.
As a maker and exporter of benchtops, kitchen components, doors and bathroom units, handles, board products, timber veneers, partitioning systems, wall surfacing materials and wet area products, Laminex has a high degree of exposure to the fortunes of the housing sector.
And the housing sector has weakened somewhat.
New dwelling commencements fell in Australia from 171,000 houses in 2004 to 146,000 last year, according to Fletcher's 2006 annual report. Much the same is happening in New Zealand, as new house starts fell from 31,000 in 2004 to 25,000 last year.
Still, Worley reckons Laminex will beat last year's result.
"We're going to be ahead of last year's earnings," he said of the June 2007 result, due out in August.
But where housing has fallen back, Laminex has picked up more commercial work and is focused on Asia's potential, its rising tide of wealth and demand for housing, commercial and industrial materials. Demand from Western Australia and Queensland have also been strong lately.
Growth and expansion pushed up Laminex's revenue from $948 million in 2005 to more than $1 billion last year. Worley's challenge is to keep the graph heading up.
He is vowing to drive up profits through improving productivity, expanding the sales base and upgrading plant capacity.
He cited the installation of a new $15 million wood-fibre drying plant at Dardanup which he said had made processes there more cost-effective.
The purchase of Dunedin benchtop manufacturer O'Brien Laminates last May was another example of Laminex's expansion which had resulted in revenue gains, he said.
Fletcher bought Laminex - Australia's largest exporter of raw medium-density fibreboard - in 2002 when Waters was boss for $754 million.
The company also makes and exports large quantities of particle board, decorated board and high-pressure laminates in the Asia-Pacific region. Laminex began exporting MDF 20 years ago and sells products to China, South Korea, Taiwan, Japan and Hong Kong.
Major upgrades of capacity at the Kumeu particle board plant outside Auckland, the O'Brien acquisition and a $33 million expansion of the Dardanup particle board plant two hours south of Perth in Western Australia were highlights last year.
Worley worked in the health sector, was Whitcoull's general manager in New Zealand, then moved to James Hardie before joining Fletchers.
