19 Jun 2013

Carpet factory in Auckland to close

4:12 pm on 19 June 2013

Cavalier Corporation is closing a carpet factory in Auckland and relocating to another plant as it warns that its profits will be at the lower end of its forecasts.

The company is consolidating its carpet tufting operatings by relocating its subsidiary, Norman Ellison Carpets in Onehunga, to its main tufting site in Papatoetoe.

The move will be completed by December and will mean job losses for some of the 62 employees.

The company said the number of redundancies will not be known until NEC tufting staff have time to consider the new options at Papatoetoe.

The company has also warned that normalised earnings will be at the lower end of the forecast of $6 million to $10 million.

Chief executive Colin McKenzie said conditions in Australia, which contributes more than half its revenues, remain subdued but are expected to improve.

He said the cash impact of the consolidation project will be $1 million and the benefits will start to flow through from early next year.