Nuplex sticks with Asia in bid for growth

Nuplex managing director John Hirst is to retire on July 1 after 46 years with the company. Photo / Dean Purcell

Expansion into Asia is on the cards for international resin manufacturer Nuplex Industries, which reported record profits last week.

John Hirst, managing director of Nuplex, said growth in Asia was a major contributing factor to the company's improved performance last year.

"If you look at the world today, there's no doubt whatsoever that manufacturing is moving from the traditional areas - like the US and Europe - to Asia, and I think that move is pretty permanent," he said.

Nuplex, founded in Auckland in 1952, has operations in China, Vietnam, Indonesia and Malaysia as well as a joint venture in Thailand.

It also has manufacturing locations scattered across Europe, the United States and Australasia.

The group's products are used in a number of industries, ranging from adhesives and paint to construction and car production.

Nuplex has two manufacturing plants in China. One, in Foshan, was opened in 2004, and another, in Suzhou, came as part of an acquisition in 2005.

"We're currently in the very advanced stages of planning and getting the regulatory approval to increase the capacity of the Suzhou operation," said Hirst.

The capacity of the Suzhou site would be expanded by around 200 per cent, eventually making it the largest operation in the group.

High growth rates - up to 30 per cent - low labour costs and taxes, massive domestic demand and cutting edge technology made doing business in Asia "a pretty darn difficult combination to beat", Hirst said.

Nuplex's factory in Vietnam, near Ho Chi Min City, was commissioned in 1997.

"We've already been through three expansions in that particular operation and we're about to go through the fourth expansion."

Although Vietnam's Government was essentially communist, it encouraged capitalism, Hirst said.

Doing business in Vietnam was quite interesting, with a local branch of the Communist Party conducting yearly internal audits on all aspects of the business - such as the quality of food in the staff canteen, working conditions and the environmental impact of the plant.

"It's a different approach," he said. "It doesn't make life difficult, in fact it's quite the opposite, because we do things well we have become the preferred company and it's easy then to get staff and support from the locals."

Business in Vietnam was booming, and the population highly educated.

"Every time you go to Ho Chi Min [City] it's changed," he said.

While Nuplex has cut down staff numbers in many of its Western operations, including New Zealand, the group was rapidly increasing its head count in Asia.

Hirst said the company was working towards opening a new research and technology centre in Asia, although the exact location was still not known.

"China's a potential, Singapore's a potential, there are a number of factors to take into account, including availability of appropriate personnel, relationships with teaching facilities and our ability to have access to highly sophisticated analytical equipment."

But Auckland-born, Sydney-based Hirst's time at Nuplex - where he has worked for the past 46 years - is drawing to a close. He will retire on July 1. His successor will be Dr Emery Severin, an Australian.

Hirst could not have planned a better time to step down, after steering the group through troubled waters over the past 18 months to report unprecedented profits last week.