Most of Skellmax's Flomax factory in Auckland would be relocated to China, the company confirmed at its annual meeting yesterday.
Eighteen of the 43 jobs at the Mt Wellington vacuum manufacturing factory could be affected.
Managing director Donald Stewart said the move would enhance profitability and enable the company toincrease its market share in industrial and dairy markets.
Skellmax manufactures rubber products for the dairy industry and vacuum pumps for dairy and industrial uses.
Stewart said the relocation was the second phase of developing the company's China operations after last year's acquisition of a rubber factory, which was now producing gumboots.
Full benefits of the relocation were expected to be captured in the 2005/2006 year.
Stewart said the company anticipated an 8 per cent increase in net profit for the year to June next year, which would bring it back in line with its net profit of $12.59 million in its prospectus for the year to June 2003.
Net profit for the year to June dropped 8.1 per cent to $11.6 million.
It was expected sales from outside New Zealand would increase to 52 per cent of total sales for the year to June 2005, up from 48.8 per cent last year.
Chairman Keith Smith said as benefits started to flow from recent acquisitions and the new China plant, the company's global income was expected to keep rising at rates higher than it could achieve within New Zealand.
Stewart said the focus over the medium term was on getting its technical polymer and vacuum products into niche markets globally, its general rubber goods into Australia, and on improving distribution within the Australasian rural and industrial sectors.
