Nuplex provides strong glue

Friday 30th January 2004

A stronger Kiwi dollar has done little to dent the confidence of investors in Nuplex shares. This is despite the company selling three-quarters of its product offshore.

The shares have broken through $4.50 for a 36% gain since January last year, following a 63% rise in net profit to $20.7 million for the year to June 2003.

The company is forecasting a 20% jump in net profit to $25 million for the coming year provided current conditions including currency movements prevail. Underlining this: last year's profit would have been $1.5 million better were it not for the stronger kiwi.

By the same token, Nuplex's increased offshore exposure is creating new growth opportunities, particularly in Asia. The company has experienced strong growth in Vietnam and is reaping benefits from its acquisition of Asia Pacific Specialty Chemicals (APS).

With exports to Asia of about $20 million a year, Nuplex now has sufficient market share to counter fierce competition from other products.

In his latest address, chairman Fred Holland signalled plans to set up a factory in China to supply Asian markets more cheaply.

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