25/01/06 Plastics manufacturer turns to China

Wellington plastics manufacturer Calvert Plastics plans to produce a plastic pallet in China because of cheaper costs there.

Co-owner and trading manager John Matthews said the company, which employed 20 fulltime staff in Stokes Valley, was testing the new plastic pallet, which could take heavy weights, with an American customer.

"I've been forced to get prices in China.

"I can buy the finished product in China for what I can buy the raw materials in New Zealand."

Freight costs had also risen.

"We are going to make it in China and ship it throughout the world hopefully."

China was a good place to export from - "slap bang in the middle of the world".

"As soon as these trial ones get to the States and the customer is happy with them, I'll be going to China to get the whole thing going - which will be next month hopefully."

He would rather make the pallets in New Zealand but it was not viable.

"We can make them in China, get them shipped out here, and we can sell them for a similar cost to a wooden pallet."

About 75 per cent of Calvert Plastics' business was making plastic components for other manufacturers. The company was experiencing fewer orders.

"We are finding our customer base is feeling the pinch at the moment.

"The end of last year started to get quite difficult...and that's still continuing. We are not predicting any layoffs but we are predicting tighter conditions at least for the next six months anyway."

The company had been forced to shoulder a 5 per cent wage rise. Electricity costs had risen to nearly double what they were two years ago.

"At one end you've got the high dollar affecting our customers not selling as much overseas. And at the other end you've got all your costs rising continuously."