25 Sep 2012

Shares slump 6% as chemical plants cut back

8:38 am on 25 September 2012

Shares in the resins and chemicals maker Nuplex Industries have slumped 21 cents (6.6%) to $2.97 after news it will close plants and axe jobs in Australia and New Zealand due to a high exchange rate and weak demand.

Nuplex will close its Onehunga plant and its high-temperature facility at Penrose, affecting up to 40 jobs over the next couple of years.

Australasian regional president at Nuplex, Sam Bastounas, says that the firm has experienced tough trading conditions on both sides of the Tasman over the past 18 months.

"We've made the decision to streamline our operations ... we will be closing down some of our facilities that are older or that we haven't been able to find a way to upgrade," he says.

"We're looking at under 10% of our entire workforce."

The company has 800 employees in the two countries, but Mr Bastounas says it is too early to estimate exactly how many of the job losses would be in New Zealand.

Impacts of high exchange rates for the currencies of both countries were a key factor in the rationalisation - particularly in terms of cyclical and structural change in the manufacturing sectors - while another key sector around the construction industry was at a cyclical low point.