Skellmax spending NZ$20 m on firms in New Zealand, Australia-and the UK

By Liz White, ERJ staff

Auckland, New Zealand-Skellmax Industries Ltd in New Zealand has been actively pursuing its expansion strategy. The Auckalnd-based manufacturer of rubber dairy equipment, footwear and vacuum pumps announced 1 Aug that it is adding two rubber businesses in New Zealand, one in Australia and a fourth in the UK-although the latter deal is not yet finalised.

In New Zealand, Skellmax is buying Thorndon Rubber Co. Ltd in Wellington, and Rubber Services Ltd in Auckland. Skellmax said both these businesses provide the print and manufacturing sector in NZ and Australia, with a first-class roller recovering service,” adding that this is an area Skellmax has not had a significant presence in to date.”

The firm has also bought Jenco Products Pty Ltd in Melbourne, Australia, a supplier of above and below ground plumbing products which complements Deks Industries, Skellmax's main operating subsidiary in Australia, which it bought in early 2004.

The Thorndon deal was completed in July, while the other two took effect 1 Aug 2005.

Skellmax managing director Donald Stewart added that negotiations on acquiring a UK business, in a sector which complements the company's agricultural business, are currently being finalised.

Skellmax is spending about NZ$ 20 million (Euro 11.6 million) on these acquisitions and said the added businesses will push group turnover up by about NZ$ 17million, while earnings (EBITDA) will be boosted by about NZ$ 3.5-4 million. For fiscal 2004 (ended 30 June 2004) Skellmax's turnover was NZ$106.4 million, while EBITDA was NZ$22.4 million.

Stewart said the acquisitions will also add significantly to the capabilities and intellectual property of the group.”

These deals follows earlier evidence of the group's growth strategy: in early 2004, along with the Deks buy, Skellmax announced that it was leasing industrial space in Jiangsu, China to develop a new offshore manufacturing plant The Chinese unit was set up as a low-cost production site from which to produce non-technical rubber goods.

Auckland headquartered Skellmax makes rubber and foam products, footwear and vacuum pumps, for two core businesses-agricultural and industrial customers.

In agricultural products-through Skellerup Industries-the group has what it calls, the world's third largest dairy rubberware manufacturer. Skellmax's major manufacturing plants are in Christchurch (rubber and industrial products) and Auckland (vacuum pumps).