Former Bendon managing director Hugo Venter has wasted no time getting to grips with his new charge.
Venter, who last month bought a 40 per cent stake in Arthur Ellis, one of New Zealand's oldest companies, is cutting 95 jobs in Christchurch and Dunedin following a decision to manufacture tents, backpacks
and outdoor clothing overseas.
The 53 jobs in Christchurch and 35 fulltime and seven casual positions at Mosgiel will be axed just before Christmas.
The company lost $1 million on its manufacturing operations last year, said Venter, the chief executive of Arthur Ellis.
He said 90 per cent of the components of the outdoor products were imported and New Zealand labour made up just 30 per cent of the value of the finished goods, some of which were then exported.
Manufacturing was likely to be moved to eastern Europe, Mexico and Asia.
Venter said that after reviewing the business, he could see no way of reversing the loss trend for the outdoor products division unless manufacturing was shifted overseas.
The company made an overall profit last year, although Venter would not reveal details.
Import duties in New Zealand were very low and there was no protection in the domestic market, he said.
Most of the raw materials came from overseas and New Zealand was simply an assembly plant for product that was re-exported.
Arthur Ellis would still produce duvets and pillows in New Zealand, retaining 97 staff - 65 in Christchurch.
"These decisions are never easy, but in the interests of long-term success we needed to make sure the platform here was stable," Venter said.
He expected staffing to expand again in New Zealand, where he said design, and research and development, was strong.
The company exports to several countries, but 70 per cent of the turnover is in New Zealand.
Venter said Arthur Ellis needed to double its goal of $50 million annual turnover before it considered a public listing.
The company intended to retain its head office in Christchurch. The rest of the company is owned by AMP Henderson Private Capital.
- NZPA
