Product manufacturing is often characterised as competitive and susceptible to currency and commodity price movements, multinational competitors and the adoption of alternative technologies. Companies try to reduce these risks and maintain margins by investing in their own plant and equipment, by hedging part of their delivered raw material and energy costs and by continuously improving their production and supply chain efficiency. Specifically, SKL has indicated its near-term focus is to develop higher margins, more technical products and continue to expand its global operations, particularly within the United States [1].
SKL competes directly with other domestic and international manufacturers of synthetic and rubber-based dairy and industrial products that are also trying to attract customers through various pricing, quality and other customer propositions. Three of its larger competitors within the industrial and dairy sectors are Hutchison in France, Trelleborg in Germany and Avon Rubber in the United Kingdom that each have significant global presences, product sets and channels-to-market.
SKL successfully established a multinational and vertically integrated business model with reliable channels-to-market across a diverse set of countries. It also operates in a range of industries and exports to a number of different countries, giving it the opportunity to allocate more of its resources to sectors with favourable demand drivers and to distribute more of its products to countries with favourable exchange rates, and vice-versa. Going forward, it should continue to benefit from increased sales and economies of scale through organic growth, expanding its product range and geographic presence, optimising its operations and vertically integrating up the supply chain as well as undertaking complimentary and value-accretive acquisitions. Its downside commercial risks could include: a broader economic slowdown, particularly within the dairy, mining and building sectors, that could affect the propensity of consumers to upgrade and maintain their assets or purchase discretionary rubber-based products; continued erosion of market share and gross margins from other multinational competitors with greater economies of scale and just in time manufacturers who hold little inventory, especially in the larger and more competitive American, European and Asian markets; loss of a key customer, distributor, supplier or employee; changes to the availability, quality and delivered price of raw materials and third party supplier costs that are unhedged and cannot be passed on to customers through pricing increases; an appreciation of the NZD, which would lower the unhedged value of its exports and any foreign capital it chooses to expatriate back to New Zealand (equally, however, this could lower the NZD-equivalent cost of any manufacturing, packaging and distribution undertaken outside of New Zealand); greater international product restrictions and regulations that may increase its compliance costs or prevent it from selling certain products in some markets; the development and widespread adoption of an alternative, cost-effective technology or application by a competitor; and any inheritance of undue liabilities or commercial risks through new product offerings, acquisitions and entrances into new markets.
2002: SKL, originally The Para Rubber Company, was established in New Zealand in 1910. It was originally listed on the New Zealand Stock Exchange in 1948 as Skellerup Industries (SIL.NZ), but was acquired by Brierley Investments in 1987, Conewango Products Corporation in 1993 and again by Viking Pacific Holdings in 1996. SIL was renamed Skellmax Industries and was relisted on the New Zealand Stock Exchange in 2002 (SKX.NZ) following the acquisition from Viking Pacific Holdings of Skellerup Industries, Ultralon Products (NZ), Batavian Rubber, Skellerup Footwear and Flomax International
2004: SKX acquired: Deks Industries, an Australian rubber manufacturer of rubber-based products sold primarily to the international building sector; Stevens Filterite, a New Zealand rubber manufacturer of milk filters for the Australasian dairy industry; and Bisleys Environmental, a New Zealand supplier of geo-synthetic liners that contain water or other liquids within reservoirs or dams. It also began to vertically integrate internationally by establishing a gumboot manufacturing facility in China
2005: SKX continued to grow organically and through the acquisitions of: Thorndon Rubber, a New Zealand supplier of rubber roller recovery products to the printing sector; Rubber Services, a New Zealand manufacturer of roller recovery products to various industrial sectors; Jenco Products, an Australian supplier of rubber products to the plumbing industry; and Ambic Equipment, a United Kingdom supplier of dairy hygiene equipment
2006: SKX changed its name to Skellerup Holdings (SKL.NZ) and acquired Gulf Rubber, which saw it increase its international manufacturing capabilities and broadened its product suite across the household appliance, automotive, medical, irrigation, water supply and plumbing industries
2007: SKL continued its acquisition focus by acquiring Tumedei, an Italian manufacturer of industrial rubber products
2008: SKL undertook an equity capital raising with the aim of reducing its corporate debt levels. It also divested three of its containment systems businesses, its conveyor and mining business, and its roofing and waterproofing business
2009: In light of the global financial crises, SKL undertook a further equity capital raising to repay debt and fund its working capital requirements. It also sold its Alucobond business
2010: SKL undertook another equity capital raising to continue to reduce its debt levels
2014: SKL acquired two relatively small but complimentary European businesses to expand its exposure within the European dairy sector. It also acquired an Australian competing foam manufacturing and distribution business, Thermoplastic Foam Industries
2016: SKL commissioned a new dairy rubberware manufacturing facility in Christchurch to replace its existing plant, which was damaged during the Christchurch earthquakes
2019: SKL expanded its technical expertise after it: acquired a 35% interest in Sim Lim Technic of the United States that designs and manufactures liquid silicone rubber products and acquired Nexus Foams of New Zealand that designs and manufactures foam and soft material components
2020: SKL acquired Silclear of the United Kingdom, that manufactures silicone products for the dairy and medical industries. The global Covid-19 pandemic forced major nations to temporarily close their borders and restrict people’s movements. This caused major disruptions to supply-chains, employment and consumer demand in almost every sector
SKL was first listed on the New Zealand Stock Exchange on 19 June 2002. It had 192.8 million shares on issue at the end of the 2018 financial year, 8% of which were owned by Sir Selwyn Cushing, 7% by H&G and the rest by a mix of approximately 5,200 retail and institutional investors.
SKL has 5 board members who, at the end of last year, collectively owned 20.8 million shares. The board comprises of:
- Liz Coutts has been the Independent Chairperson since January 2017 and an Independent Director since May 2002. Liz comes from a management background, having held many Directorships across several sectors. She also currently serves on the boards of Oceania Healthcare, Ebos Group and Ports of Auckland;
- David Mair has been the Executive Director since November 2006 and was appointed the SKL Chief Executive Officer in August 2011. David is also a Director of several private New Zealand companies
- John Strowger who has been an Independent Director since March 2015. John is a practising commercial lawyer and Partner at Chapman Tripp;
- Alan Isaac has been an Independent Director since August 2016. Alan is also a Director of Oceania Healthcare, Scales Corporation and a number of other private companies; and
- David Cushing has been an Independent Director since August 2017. David is also the Executive Chairman of Rural Equities and serves on the boards of PGG Wrightson, H&G, Webster and Red Steel.
David Mair has been the Chief Executive Officer of SKL since August 2011. David comes from an engineering and management background, having previously been the Executive Director of Interlock Group and the Vice President of Asia Pacific Operations for ASSA ABLOY (Sweden). David is currently also a Director of several private New Zealand companies.