Scott spreads wings

By Phil Boeyen, ShareChat Business News Editor

Thursday 16th August 2001

Scott Technology (NZSE: SCT) is launching a new manufacturing unit to counter a downturn in business from the US and South America.

The company, which makes systems for appliance manufacturers, says the new subsidiary will be called Scott Automation and will be set up in Dunedin, marking a new business direction for the division there.

The subsidiary will take the company's expertise in technology and automation and focus on non-appliance industries such as timber and food.

"Scott Automation will focus on developing automated solutions for basic industries, including the smelter, timber, industrial manufacturing, food processing and primary industries," says CEO Kevin Kilpatrick.

"Projects are currently being developed for clients in this industry group."

The new unit will be a stand-alone operation headed by general manager Andrew Arnold. It will have its own board of directors and will be chaired by former MD of Scott Technology, Graham Batts.

Mr Kilpatrick says the development of Scott Automation as a separate business unit has been a carefully developed strategy to widen the scope of the company's business.

"The company is going through a flat period, with the downturn in the U.S.A. and South American economies restricting the level of capital expenditure emanating from appliance manufacturers in those markets.

"The company's short term trading is being affected by this downturn in the U.S.A. economy and unusual levels of competition world-wide. However, the Directors and Management are confident of the potential for both business units in the medium term, with the company remaining in a strong financial position."

Appliance design and manufacturing will now be mainly undertaken at the company's Christchurch facilities, which have been substantially expanded over the past two years.

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