Thursday, 24 April 2014


ADDRESS: NPX: Annual Meeting

31 Oct 2008 09:20NZX
The Chairman and Managing Director will deliver the following addresses to
the Annual Meeting of shareholders of Nuplex Industries Limited to be held at
10.00am on Friday 31 October 2008 at the Theatre at the Waipuna Hotel and
Convention Centre, 58 Waipuna Road, Mt Wellington, Auckland, New Zealand:

Net profit after tax for the year ended 30 June 2008 of $48.3 million was 84%
ahead of the previous year and sets yet another record in the company''s
growth history. This was after providing for unusual items totalling $5.1
million related to remediation costs and goodwill impairment.

Turnover of $1.532 billion is 6% ahead of last year and is also at a record

Your directors are pleased that this result has been achieved despite
difficult trading conditions experienced during the year. Raw material and
other costs such as freight continued to rise during the period as the
effects of high oil prices flowed through the supply chain. Demand slowed in
our traditional home markets of New Zealand and Australia as our
manufacturing customer base continues to migrate offshore, although Australia
was impacted to a lesser extent.

This good result was achieved as a consequence of successful strategies that
have been followed for a number of years of spreading market risk across a
broader geographic area and product range, together with effective management
actions. In particular, the successful recovery of raw material cost
increases through pricing, and cost reductions associated with the
rationalisation of large acquisitions made over the past five years. The
benefits of these investments were progressively gained during the year and
actions were taken to achieve the remainder during the current year.

It was especially pleasing that the European resin business and recently
restructured Speciality Products segment both made major advances in their
contribution to company performance. The European business was successful in
turning around the loss making UK operation and improving margins through
more efficient use of resources and achieving raw material cost recovery.
Speciality Products was successful in extracting the anticipated benefits
arising from closure of the Seven Hills manufacturing site.

Operating cash flows improved to $75.4 million from $14.2 million last year
reflecting the improved operating profit. Inventory was held at last year''s
levels but trade receivables and payables increased due to higher pricing and
longer terms.

Capital expenditure was $36 million with 65% of this expenditure invested in
capacity increases and operational efficiencies that will have a positive
effect on future returns.

Net debt as a percentage of total tangible assets remained constant at 42%
while total net debt as a percentage of total funds employed decreased from
53% to 52.1% with senior debt at 45%, in the middle of the Director''s target

The improved financial performance enabled directors to increase the final
dividend to 23 cents per share. You would have received this on 17 October.
This increases total dividend for the year by 19% to 43 cents per share, a
distribution of 72% of earnings. The dividend is fully franked for our
Australian tax paying shareholders but unfortunately, because of minimal tax
paid in New Zealand there are no imputation credits available for
distribution to New Zealand resident shareholders at this time.

Directors have been active this year in continuing the programme of
refreshment to ensure that we maintain a board that is qualified to take the
company forward on the next stages of growth and development.

On the 1st of September we appointed Barbara Gibson as a director. Barbara''s
qualifications and work history are tailor made to make a significant
contribution to the future success of a global chemical manufacturing and
distribution business like Nuplex.

Barbara gained her Bachelor of Science degree at Monash University. She
enjoyed a very successful career in the Australian chemical industry, with
the 20 years prior to retirement in 2005 employed by Orica Limited, formally
ICI Australia. Barbara held several senior executive positions within the
group culminating in 8 years as the Group General Manager of the Chemicals
group, an operation of a similar size to Nuplex, operating in 15 countries
mainly in Australasia and Asia. She led the group through a period of strong
growth including the acquisition of 11 companies.

Since retirement from Orica, Barbara is having success as an independent
director on the boards of other companies listed on the Australian Stock
Exchange, none of which has a conflict of interest with Nuplex. She is a
resident of Melbourne

The directors have already recognised that her experience is making a strong
contribution to board discussions and highly commend her to you when you are
asked to confirm her appointment later in the agenda.

I announced my decision not to offer myself for re-election when I retire by
rotation later in this meeting. I still enjoy my association with the company
that has been part of my life for 46 years and I am sure that I will miss the
challenge of the future growth but it is important that people who lead the
company on the next important stage are around for at least 5 to 10 years to
see the projects through. With the best will in the world that cannot be me.

The board has resolved that it is their intention to elect Rob Aitken as
Chairman provided that you re-appoint him later in the agenda as he also
retires by rotation.
During the two years that Rob has been on the board he has demonstrated he
has an extremely good understanding of the fundamentals required to lead the
Board of a global manufacturing and distribution business.  His experience
managing Southcorp Water Heaters and Southcorp Appliances as well as
President of Formica Corporation for the US and Europe certainly provides the
right background. Rob is also on the board of two ASX listed companies which
gives him a good understanding of what is required to add value to Nuplex as
non-executive Chairman.

It is expected that with a chairman based in Australia we will be able to
generate greater interest in our shares in that larger market yielding a
higher price earnings ratio and giving us access to a larger capital market
to fund future growth.

Working with Rob for two years on the board I have gained a great respect for
his experience and integrity. I am comfortable that he fully appreciates the
principles that have led to the success and growth of Nuplex and that he is
dedicated to maintaining that success.
Rob will address you after the election has been dealt with.

I know that your minds are probably dominated by the current turmoil in world
investment markets and what effect that this will have on the performance of
Nuplex. We are all well aware of the negative impact on our share price but I
am encouraged to note that these massive swings have been based on low
turnover perhaps indicating that most shareholders continue to have
confidence that the company is well positioned to weather the storm.

Since August the company has experienced a softening of demand across most
segments of business but with cost reductions already in place the first
quarter earnings are tracking close to last year.

The crystal ball is cloudier than usual with demand changing day to day and
seemingly relying upon the current perception of the chances for financial
market recovery.  Our full year result will be dependent upon how long demand
is constrained however if the New Zealand and Australian currencies remain
soft then conversion of income from European, American and Asian operations
will make a positive addition to our bottom line.

In the meantime all that we can do is to ensure that additional cost savings
hanging over from last year''s investments are fully achieved and that we take
advantage of any opportunities that arise. If there is a return to more
normal demand coming into the 2009 calendar year then we anticipate
maintaining a degree of growth over last year.

The good thing about having a business that covers a very wide range of end
use applications and geographic spread is that if any particular area comes
out of the disruption early, we are in a position to take advantage.

I will now hand you over to our Managing Director who will bring you up to
date on the state of our business portfolio.


Thank you Mr Chairman.

As has been said already, 2008 was a good year for the company.

With demand from global markets differing appreciably between regions, the
value of exposure to multiple segments and geographies was clearly seen.
Europe and Asia lead the way with strong demand and improved operational
performances which increased both margins and profits.  Life was difficult in
the US but we were less exposed to more volatile market segments, and the
business did well under the circumstances.  Conditions were soft in
Australasia, and in spite of this, we delivered a respectable result.

Staff introduction

I would like to introduce the senior management here with us today who have
delivered a record operating profit, in line with the guidance provided to
the market 12 months ago.

On the podium, we have the Group General Managers with responsibility for all
the business units - Sam Bastounas, Rob Harmsen and Charles Northcote.  They
are members of the executive group and I will introduce them more fully
later. Also here of course we have Graeme Storey, our CFO, who is also a
member of the executive.

Graeme has advised of his intention to retire at the end of the first quarter
of next year, so today is his last Annual Meeting as CFO of Nuplex. I would
like to take this opportunity to acknowledge the substantial contribution
that Graeme has made to the group over the past 20 years. He has been an
exemplary manager, always having the interests of the company at heart,
willing to work all hours and all days to fulfill the undertakings of his
position. He is a totally honest and decent man and I feel privileged to have
been associated with Graeme over all of his Nuplex career, and particularly
over the past 8 years when we have worked so closely.
I also thank Graeme''s wife Wendy for her contribution to the company and wish
them both well for the future. I know that Graeme''s professional life has
further challenges and he will continue to make a major contribution for some
years to come.

Tony Cooke is our Group General Manager Operations, and a member of the
Executive. He is responsible for manufacturing, SHEQ and engineering.

From Europe, we have Paul Kieffer.  Paul is General Manager for Europe,
Middle East and Africa and has bragging rights today as the provider of the
biggest regional profit uplift last year.

Also from Europe, Harald Hoffman.  Harald was based in Singapore where he was
responsible for the development of the Asian automotive market. He has
recently relocated to Europe as Business Development Manager, Emerging

Bob Skarvan is also Europe based.  Originally Sales Manager in the US, Bob is
now Group Supply Manager and is responsible for around $850 million of raw
material purchases.

William Weaver was appointed Group Technology Manager earlier this year.
William resides in the UK and maintains an office in the Netherlands
operations. He is profiled in our Annual Report.

From the US we have Mike Kelly, General Manager of the Americas.  Mike is
based in Louisville Kentucky and oversees the two US based plants and the
Brazil sales operation. Both Mike and Paul Kieffer have brought their lovely
wives with them to see New Zealand at first hand.

Ruben Mannien is originally from the Netherlands and was until recently the
General Director of our Vietnam operations.  He is now based in Shanghai
managing the China businesses with further responsibility for Japan and

Much closer to home, we have Richard Allan, one of our long term employees
who is General Manager of the New Zealand resins business.

Another long term employee, David Evans is also based in Auckland and is
General Manager of our Construction Products Group.

From the Polychem group comes Mark McLean who has recently moved back to New
Zealand from Australia.  He is General Manager of the Polychem/Multichem
Group and also has responsibility for APS New Zealand operations.

And from Australia, Judy Gulikers, our Group Financial Controller, a long
term employee who completed a 2 year assignment in the Netherlands before
returning to her current position in Sydney.

Mike Law is General Manager of Nuplex Resins Australia and based in Sydney.
He is another long term employee.

Paul Schott, General Manager of the Composite group of businesses.  Sydney
based and has been within the AC Hatrick and Nuplex operations for a very
long time.

Stuart Barry, Group General Manager, Communications and Business Systems is
also Sydney based and keeps the businesses talking to each other around the

I have an apology from Ercilia Barahona, General Manager of our Paper
business.  She is currently on leave in her native Chile.

These are the leaders within the company responsible for delivering an
excellent profit, and solid cashflow, enabling a substantial dividend to be

Prior to passing over to the Group General Managers to discuss their specific
businesses there are a number of matters with which I will deal.

Safety, Health & Environment

It was a good year for environmental performance but safety results were
disappointing. In particular there were persistent lost time injuries in
spite of increased management vigilance and ongoing investment in securing a
safe workplace.  Culture and personal responsibility play a major role in
safety and environmental outcomes and management recognises that where these
fall short of the appropriate standard, action must be taken. This will be
achieved by increased influence, consistency and robustness of management in
dealing with non-compliance with policies and procedures, further training,
and above all, leadership. There is a real determination that this
deterioration in safety performance is short term, and confidence of a quick
return to our long term trend of improving performance.

Lower waste generation and disposal, and more efficient use of utilities made
a positive contribution to the environment, while lowering costs.  With the
high price of energy, and a focus on reducing the group''s carbon footprint,
management have set demanding targets for improvement in the coming years.
Advances made by our technology and process specialists in developing more
efficient manufacturing procedures will continue to play a significant role
in achieving this.

Compliance with international product registration systems is requiring
significant resource. I am pleased to confirm that the company is in
compliance with all active systems and is presently preparing for the
imminent introduction of REACH, the European register.  These registers are
increasing in their spread and complexity.  Designed as the basis of ensuring
safe handling and management of chemicals for the benefit of the community,
they are fast becoming bureaucratic nightmares, an inhibition to development
in small economies with insufficient scale to support the costs of
registration; and finally an effective barrier to import competition in large
economies. However, remaining compliant is an essential part of our business.

Raw Material Costs

Raw material costs, and in some instances, availability, continued to take
much management attention.  Crude oil pricing was higher and volatile, and
had an impact on all segments of our raw material inventory from solvents
through natural oils, to petrochemicals.  Sound purchasing strategies ensured
we retained our relative competitiveness with major industry players - and
equally as important, the businesses continued to be generally successful in
passing through increased costs.

On the supply side, a lack of availability of certain products as a
consequence of strong global demand meant that our Specialty Products
business was unable to accept some orders dampening performance somewhat.


With some 90% of profits being earned in regions outside New Zealand, our
actual result is subject to the vagaries of foreign exchange rates.  There
are natural hedges in place with borrowings matching assets in the different
regions, leaving only net profits exposed.  This exposure is spread roughly
evenly between the Australian dollar, US$, and Euro.  With a strong NZ dollar
over the past financial year, reported EBITDA was negatively impacted by
around $1.7 million compared to the prior year.

Capital Expenditure

After a number of years of investing heavily in plant, equipment and site
upgrades to meet current standards for health, safety, environmental and fire
protection, expenditures in the past year on sustainable business projects,
was a more normal $12 million.  This is typical of future annual compliance
investment.  The balance of capital spend of $24 million will contribute to
future earnings.

Europe absorbed 42% of the total.  As a consequence, substantial capacity was
added with state-of-the-art reactors being installed in the UK and
Netherlands for technologies representing the growth direction of the global
market, and the European market in the near term in particular.

Also in Europe, process improvements and debottlenecking added efficiency and
capacity for the production of more conventional resins in a time when demand
increased. Future needs for capital should be moderate.

Australasian capital expenditures represented 47% of the total with the major
project being capacity build in Queensland to provide additional production
for composite resins.  This will be completed within the next few months and
it is expected that future capital requirements for Australasia will remain
relatively low.

There were no major projects in the Americas or Asia and the focus was on
efficiency and debottlenecking to add incremental capacity to meet short term
needs, and improved fire protection. In addition, new bulk storage and
handling facilities were provided for the acquired G-Cure technology.  Future
expenditure needs are anticipated to be moderate in the US and high in Asia,
with a near term focus on China and Indonesia to expand both capacity and
capability to produce a broader product range.

Working Capital

Working Capital continues to be a major focus for management.  These are
difficult times.  Consolidation of the customer base has created an
environment where there is constant pressure to extend trading terms while
consolidation of the supply side has somewhat reduced the ability to leverage
improved terms to compensate. Higher material costs, leading to increased
selling prices, has also raised unit inventory value.  Management has
responded with a more robust position on trading terms and major product
rationalisation programme to improve efficiency and reduce stockholding.  We
are seeing success, and achieving an operating cashflow of $75.4 million is
in part evidence of this.

Group General Manager Presentations

I would like to introduce Sam Bastounas to you. Sam is Group General Manager,
Functional Materials and he will share with you some thoughts in relation to
his group of businesses. Sam is based in Melbourne.

Functional Materials consists of four businesses that operate in very
different market segments. What is common across each business is the need
for industry specific know how and technology to be able to offer solutions
to our customers as part of the commercial process.

Let''s look at Composites. This market involves the use of crosslinkable
resins and fibre reinforcements to create glass reinforced plastic.  The most
commonly identifiable end products are boats, surfboards and pools. Lesser
known products include, large diameter water pipes and underground tanks.

Nuplex is the largest Australasian manufacturer of these base resins and
markets these through the FGI, Nupol and NSR businesses along with a
complementary suite of products, providing a one-stop shop offering. In
recent years, the Composites Group has launched a design and development team
known as EMP. This group is focussed on developing new composite laminates
that incorporate the use of our resins and other materials to create totally
new products for the marine, infrastructure and civil engineering sectors.

The Composites group performed well in 2008 and remains a major contributor
to group profit. Global raw material prices increased substantially; however,
the impact was cushioned by the strength of the Australian and New Zealand
dollars. We were successful in maintaining margins.

Markets changed dramatically throughout the year. Firstly, inclement weather
in Australia disrupted swimming pool and water pipe reticulation projects,
two large market segments. The flight of some manufacturing to Asia
continued, particularly in the substantial sanitaryware sector while with
tightening world economies, we saw the usual slowdown in discretionary
spending. This in turn affected the marine and swimming pool market and with
business generally in slowdown mode, demand for transportation had an impact

Inevitably, the reduction in demand raised competitive activity with some
margin erosion as a consequence.

Last year a $16M upgrade to the Wacol plant in QLD was announced to
accommodate volume associated with the Huntsman acquisition and achieve
operational efficiencies essential to ensure our customers remain
internationally competitive. Further investment at the Botany plant in NSW to
manufacture vinyl esters has been committed. These resins are used in high
durability applications such as underground and chemical resistant tanks and
will allow us to develop new markets traditionally serviced by imports.

We are also well advanced with new investment in Surabaya, Indonesia to
provide much needed production capacity for South East Asia. This will
complement existing capability in Vietnam. China will be the next focus for
our Asian growth strategy.

2009 is proving to be markedly different to last year. Sales of yachts,
leisure craft and swimming pools have been affected by a net reduction in
disposable income and increasing uncertainty about the future.

In light of this, our strategy is to tightly control costs and focus on
growth through innovation and regional expansion. It is expected that these
initiatives will reduce dependence on traditional markets, creating a lower
risk profile for the future business.

Construction Products is the foundation business for Nuplex and is involved
in the supply of flooring, waterproofing systems, adhesives and other
construction products made from Nuplex resins. It also offers a range of
resilient flooring and auxiliaries.

This business had an excellent year with strong demand from the primary
sector and growth in both waterproofing and industrial flooring. We noted
some changing customer preferences towards low odour, more environmentally
friendly products from overseas which  had a minor impact on sales. However,
new products have been launched in the key architectural, food preparation
and dairy sectors to successfully counter this.

An example of this is a solvent-free, seamless polished resin floor in the
new arrivals hall of the Auckland international airport. Use of this
innovative technology will be extended to become a platform for future

The Australian flooring business has been struggling for a number of years
but over the last 12 months, people changes coupled with the introduction of
new products are seeing this business turnaround albeit from a very small

Plaster Systems also forms part of the Construction Products group and deals
with light weight cladding systems commonly referred to as E.I.F.S. This
business has been stifled for the last few years as a result of the "Leaky
Homes" saga. Whilst our products haven''t been the cause of the problem, the
association with the monolithic construction regime has seen sales steadily
decline and the market contract in favour of alternative materials.

We have reacted to this change by launching 2 innovative building product
systems Graphex and Enduron. These have been well received by architects and
leading housing companies. Graphex provides outstanding energy saving
benefits while Enduron is a unique masonry product, giving entry to one of
the largest building material sectors in New Zealand.

The Australian EIFS business has been problematic for many years and this
business will be sold.

Construction Products group faces a challenging year ahead in a soft and
competitive market. Nevertheless, we remain optimistic that through a renewed
focus on innovation, coupled with tight cost and inventory control, we will
improve our prospects in coming years.

The third Business within Functional Materials is Paper. This business is the
largest supplier of functional chemicals to our local paper, board and tissue
manufacturing industries. Much of the technology used in this business is
licensed from Hercules in the USA, the leading paper chemicals supplier
worldwide. Hercules'' focus on excellence creates an ideal alignment with

The paper group also has its own proprietary coating resin technology; these
unique and innovative products represent an opportunity to expand this
business beyond Australasia.

2008 was a flat year for Paper with growth limited as Australasian paper
makers struggled to be competitive with imports, and also in export markets.
We expect that weaker currencies will assist the industry and also make
locally manufactured chemicals more cost effective. 2009 is anticipated to be
a year where we see some churn with known new business and a number of
opportunities well advanced in their development phase, compensating for some
loss of traditional sales.

The fourth of the businesses within the Functional Materials portfolio is
Culamix, our masterbatch operation. Making Masterbatch involves taking
plastics that are pliable when heated and infusing pigments and functional
additives into them to create a concentrated carrier that is then extruded as
pellets. This concentrate is used by manufacturers of plastic goods to
provide colour and special effects.

Products as varied as shampoo bottles, children''s play equipment, cosmetic
containers and every day items like buckets and bins all come to life with
the vibrant diversity of Culamix colours.

Culamix had a strong 2008 driven largely by improved operational performance
and disciplined pricing.  Two weeks ago, Culamix Vietnam was regrettably
affected by a fire and our immediate focus has been to satisfy customers from
Australasian plants whilst planning for the future. We expect no loss of

There is no doubt, that we are managing against a backdrop of a fluid and
uncertain economy and it remains unclear how and when things will stabilise.
However, we have embarked upon a strategy of tight cost control and cash
management, product and service innovation, as well as regional expansion and
see these as the key drivers for our successful future.

Thank you

Thank you Sam

Rob Harmsen is Group General Manager of Nuplex Resins and will give some
detail on what happened in the past financial year. Rob has moved from the
Netherlands to base himself in Sydney.

Nuplex Resins is involved in the sale, manufacturing and distribution of
resins into the coatings, adhesives, inks and textile markets. This is
achieved directly through our own organisations in 15 countries worldwide as
well as through agents and distributors where we do not have a presence.

Last year I mentioned we would see the benefits of having ''prepared ourselves
for the future''.

At that time we could not expect the turmoil we have seen and are facing even
more recently.

However, preparing ourselves for the future paid off and I''m proud that we
achieved a significant profit improvement over the prior year.

The results of turn-around actions showed particularly in the Netherlands,
The United Kingdom, Brazil and Foshan in China.

In addition, improved results from Malaysia and Indonesia, and the China
business in Suzhou, were pleasing.

Disappointing on the other hand, were the results from New Zealand,
Australia, USA and Vietnam.

In New Zealand we felt the impact of the economic downturn. Australia was a
changed landscape due to recent acquisitions and mergers in our customer base
which had its impact on our margins and profitability. The strong Australian
and New Zealand dollars impacted our export oriented customers as well as
increasing import competition.

Cost restructuring, combined with margin improvements through a positive
product mix and favourable market conditions, resulted in a substantial
profit improvement for the Netherlands based operation.

Newly introduced high solid products for vehicle refinish paint made strong
inroads into the market and were typical of the success we are enjoying with
environmentally friendly technology.

We remain committed to invest further in new and greener technologies. In
support of this, a large waterborne reactor came on steam in December 2007
and a very large powder reactor in Silvertown, UK, in January of this year.

Results in the UK were negatively influenced by the lack of capacity before
this reactor was commissioned, and then by the slowing down of the economies
in the UK, Spain and Italy after start-up. Despite that, the UK showed a much
improved result although not at levels we need nor expect to achieve.

We have appointed a Business Development Manager for Emerging Markets who
will focus on our activities in the high growth markets of Eastern & Central
Europe, and South America. Part of his assignment is to investigate
manufacturing possibilities in Eastern Europe as in time, facilities closer
to the end market will be required.

In Brazil - after having closed down production - we''re now operating a small
sales office. This is to maintain brand recognition and market intelligence
in this potentially interesting South American market. Products are now
sourced from our operations in the USA and Europe.

After a good start to the year, results in the USA declined in the second
half under adverse economic conditions, and ever increasing raw material
costs. The result was disappointing but given the market conditions, was
perhaps better than may have been expected. With relatively less dependence
on market segments subject to major cyclical swings, the effect of the
economic downturn was dampened.

We acquired the G-Cure acrylic business of Cognis. Although a relatively
small business, this highly interesting technology strengthens our leading
position in solvent borne acrylics. It also broadened the target market for
these products. Integration of the business went smoothly and we have high
expectations for this product line in the USA as well in other parts of the

Asia showed another double digit growth year.

The policy to focus more on higher margin products paid off for our China
operations in Foshan resulting in a positive EBITDA for the first time.

Also in China, Suzhou showed strong growth despite the impact of changes to
VAT legislation which negatively impacted the export market for both us and
our customers. As a result of these changes, we shifted production of resins
for the export sector from China to other operations in Asia.

Malaysia picked up part of that volume and combined with an improved product
mix produced a record high profit on a like for like basis.

Vietnam results were disappointing with intensified competition, major raw
material increases which could not be fully recovered, and an unfavourable
product mix which resulted in an EBITDA below the prior year.

Our joint venture in Thailand showed improved results, particularly in the
powder resins area. The appointment of an Australian expatriate as General
Manager to grow that business, as well as support the South East Asian
composites business, has proven successful.

With Asia being so much the focus of our international customer base, we have
appointed a key account manager to deal better throughout the region. Her
role is to optimise service to these major accounts and provide a seamless
commercial and supply relationship independent of the production source of
our products.

The strategy for Asia is to ensure that capacity of existing operations does
not inhibit growth and that we build or acquire manufacturing capability in
fast developing regions. As a consequence, we continue to invest in capacity
expansion in most of the existing Asian operations

While in its early days, we find Indian resin prospects very interesting and
are completing a study on how best to enter this market.

Operationally we continue to improve efficiency across all plants. Process
improvements developed in Bergen op Zoom in the Netherlands are now being
rolled-out to other operations resulting in improved quality, shorter
production times and better reactor efficiency. Modification of existing
reactors throughout the group continues on an orderly basis to bring
processes into line with best practice and achieve the benefits of a group
with such a diverse history.

In summary, throughout 2008 we have been able to cash in on some of the
restructuring started in the years before. This is despite adverse economic
circumstances. All loss making operations are now at least EBITDA break-even.

The first quarter of 2009 has been a tough one with deteriorating economic
conditions in most regions. With business showing substantial month to month
variance it is difficult to fully comprehend the real state of the market and
predict future demand with any certainty. However, I feel that the business
has good fundamentals and the ability to weather the storm.

The overall strategy of the business remains unchanged. We seek to grow by
investment in technology and fast growing markets, and by consolidation in
more mature markets. This has stood the business in good stead over many
years and remains as relevant today as it has in the past.

Thank you

Thank you Rob

Charles Northcote is based in Sydney and is Group General Manager, Specialty
Products and will share details of last year''s performance.

Specialty Products is reported within the Specialties segment. Its business
model is unique within Nuplex in that it does not manufacture what it sells,
and generally acts on behalf of international companies in the Australasian
market. It represents a significant opportunity for growth, particularly in
Australia and beyond.

Markets serviced are defined as Chemicals, Plastics and Life Sciences. There
is a high degree of complementary activity between Resins and Chemicals, and
between Culamix and Plastics.  For example in the manufacture of a shampoo
bottle Culamix provide the colour masterbatch while Specialty Products
provides the plastic polymer.
The Resins business is also a significant customer of Specialty Products for
a number of functional materials.  Life Sciences is principally about Food,
Nutrition, Healthcare and Personal Care markets and shares with Resins a need
for high compliance management and skills.

Our strategy consists of four main pillars:

1.      To identify value adding opportunities for the provision of raw
materials and technical solutions for customers within what is generally
known as the business to business (B2B) workspace.

2.      To identify and represent Principals (suppliers) to provide products
and solutions within this B2B space

3.      To create a low cost supply chain to realise the best value in
provision of these products and services

4.      To create a pool of Human Resource talent that is capable of working
within the Nuplex Specialty Products and broader Nuplex organisation

The business works on a vertical set of relationships between principals
(suppliers we represent) and our customers.

The past year was successful for Specialty Products, which recorded its'' best
ever'' result.

New Zealand performed satisfactorily, especially as conditions deteriorated;
strengths in the packaging sector helped offset a softening coatings market.
Solvent sales were particularly weak due to severe import competition but
consolidation of support facilities within APS and Polychem kept costs under
good control.

Australian operations had a strong year and it was pleasing that all business
units performed above expectation.  Worthy of mention is APS Surfactants that
has turned around from being a poor performer over a number of years, to
deliver strong results with plenty of potential still available.

In Australia, we have commenced a long term strategy of bringing the APS and
Multichem businesses closer together, particularly in their infrastructure to
achieve efficiency.  In so doing, we will maintain the distinctive
characteristics of each business in the way each services both its markets
and business partners.

Current New Zealand economic conditions are not favourable, especially in the
manufacturing sector.  The high interest rate and currency in recent years
have proven difficult for local manufacturers to compete and the sector has
shrunk as a consequence. Now, a rapid collapse in currency will lead to major
short term cost increases applying even further pressure, although in time it
will provide some respite for exporters.
Trading conditions are currently tough and the prospects are that there will
be no short term reversal of this trend.

The Australian market remains uncertain as the impacts of currency
depreciation and falling business confidence work their way through the
economy.  However, in spite of this a satisfactory result is anticipated as
long term development projects come to fruition.

In conclusion, the business is on a sound footing to ride through uncertain
conditions. The broad exposure to different market sectors should shield it
from the worst of the downturn and with the current momentum, any pick up in
demand will translate to improved performance.

Today, target markets are Australia, New Zealand and Pacific Islands.
However, over the mid term, the business skill base within Specialty Products
can be expected to provide opportunities to expand outside these traditional

I look forward with confidence in the ability of Specialty Products to
contribute substantially to future performance.

Thank you Charles

Strategy and Outlook

We are in difficult times but it is important that we stay steadfast to our
strategy of growth in all core businesses to maintain a balance in the
company''s operations, and to manage risk.

The Group General Managers have commented on their specific business
strategies.  We have been consistent in recognising that we have to keep
momentum in building a broader market to satisfy the needs of our global
customers, moving to where they see demand increasing, and maintaining a
strong and secure supply base to them.  We also need to increase in size to
ensure our relevance in an ever consolidating world.  And finally, we must
continue to invest in people who provide the means by which our strategy can
be delivered.

We will consider acquisition opportunities as they arise, even in these
difficult times.  Where they are strategic, and the price is realistic, we
will seek to add new assets to the portfolio.  Clearly, we will need to be
even more selective under current financial conditions, but most importantly,
we cannot let significant opportunities slip by.  Like all business
downturns, this one will in time change direction, and when it does, it is
imperative that we are in as strong a position as possible to benefit from
increasing demand.

We have a proud record of delivering to our guidance and I hope that 2009
will not be an exception - at least on the downside.

As the Chairman noted, first quarter trading was somewhat soft and I believe
this was principally as a consequence of one off adjustments in the European
market due to reduced demand. The first quarter was also largely without
direction at the EBITDA level.  In this business, we are unaccustomed to
violent monthly swings - but that is what we are now seeing.  With this as
background, making any sort of prediction is even more difficult than usual.
However, I feel an obligation to provide at least some measure of guidance.
We anticipate a first half performance a little below last year, based on our
current view of the second quarter. European demand should settle at a lower
level - but higher than the past two months, and Asia and the Americas are
expected to continue to follow recent patterns.

In Australasia, soft conditions will persist. We anticipate the second half
will be steady with some minor recovery in demand although it will be
difficult to offset the impact of soft currencies on raw material prices in
Australasia - reversing the trend of recent years. In addition, uplift can be
expected from a variety of sources as a consequence of earlier actions.
These include:

-       Full year benefit of new European capacities
-       Increased incremental capacities in the US and Asia where business
seems to be available
-       Full year benefit of the G-Cure acquisition
-       The close out of an Australian toll manufacturing arrangement
reducing operational costs
-       Uptake of new technologies with higher margins as the switch to
greener resins continues
-       A climate for softening raw material costs

If demand, cost management and raw material price recovery proceed as we
currently expect, we could see total EBITDA above last year''s record $122
million - but much of this is out of our control and we are unable to be as
certain as we would normally be at this time in our financial year. The
consensus forecast of the Analysts is in the region of $130 million. Given
some pick up in confidence in key markets, and effective execution of current
strategies, this would be achievable.


Today the curtain comes down on a long and successful career, with our
Chairman Fred Holland retiring after 45 years with the company, firstly as a
visiting expert, than as a manager, then executive director, and finally as a
non-executive director.

It has been my privilege to be associated with Fred for 41 of those years.

In his management years - 1965 to 1981 - before he became Managing Director,
Fred brought much to the fledgling business that was to become Nuplex.  His
knowledge of water based resin chemistry and manufacturing practice was
excellent. He was a great teacher, demonstrating in the plant to management
and operators alike, just how to do it properly.  A naturally nice guy,
intelligent, gutsy, with a sense of humour, and sensitive to people''s
feelings, he was also a salesman - and even looking at him today, just who
can resist that smile?

Fred''s influence on the company has clearly been considerable and on
reflection I believe that it is best shown in his role in five quite
different situations - all of which are defining moments in the company''s

The first came as early as the 1967/68 financial year. Growth was stifled by
a lack of raw material import license and exporting - which in turn earned
bonus license - this was the only answer. Founder Bill Campbell and Fred
negotiated a deal with our significant shareholder Revertex to supply in
their place a large quantity of product in a restricted timeframe to a West
Indies customer. To service this necessitated more than doubling the short
term production rate. Fred''s leadership in meeting this challenge was
outstanding. It was all hands to the deck with operations immediately moving
to a 7 day 24 hour basis. The small management team continued to meet their
own job requirements and additionally donned overalls, manned reactors, did
stores duties, stuffed containers and generally acted as additional factory
hands. Fred was in the middle of it, leading by example.

We succeeded in meeting the commitment. Resultant additional import license
enabled the tiny resin business to seek new sales and gradually establish
itself as a legitimate supplier in New Zealand and broader markets. It also
established a "can-do" attitude and adherence to the code of customer
satisfaction that remains a cornerstone of the company''s culture and strategy
today. Fred''s role was pivotal - this was a defining moment in building a
global resins business.

As Managing Director from 1981 through 2000, he oversaw much change.  The
first decade was spent under a controlling shareholder - firstly Monsanto,
and then Kerry Packer.  A difficult period during which the entrepreneurial
spirit that had built the company was inhibited and independent decision
making and strategy was not possible.  It was a time when Fred, placing his
own position at risk, faced down Packer''s henchman - appropriately named
Chainsaw Al - who was determined to see a major cut in headcount, in spite of
our company''s year on year superior operating performance.  In so doing, Fred
protected future managers from being cast out of the company, and retained
the group that in later years was to build Nuplex into what it is today.  I
believe that was the second of the defining periods for the company during
Fred''s successful career.

The fun really started again at the end of the Packer era.  No controlling
shareholders, a supportive board, and the opportunity to grow.  In those nine
years under Fred''s leadership, we acquired 14 separate operations, had grown
to 8 resin manufacturing sites in 3 countries, and grew revenues from 74
million to 383 million - a five fold increase.  The company was on its way to
becoming an international operation, and the major profit generating region
had become Australia.  What a change.  The largest of the acquisitions
occurred in 1998 when Australian Chemical Holdings became a Nuplex company.
The merger of this underperforming listed organisation tripled sales and
provided both market and geographical diversity that has underpinned the
direction and strategy of the company ever since.  This was the third
defining point in our history.  It was Fred''s concept, he was able to carry
the board with him, and the rest is history.

He was appointed Chairman and Chief Executive in 1998 and became non
executive Chairman in 2001.  I have been privileged to work with him as
Managing Director since that time.  We have kept growing - revenues, profits,
dividends.  The Board under Fred''s leadership has played a pivotal role in
this growth, contributing to strategy and maintaining strong governance
during a number of very testing times.  Three significant acquisitions stand
out as defining the current shape of the company over this period of almost 8
years during which time revenues have increased fourfold.

Firstly, Fred''s support with the Board that enabled the acquisition of APS
Chemicals was critical.  Here we again had to go through the process of
buying a seriously under performing public company.  His confidence in our
management and understanding of the business, which had significant elements
outside the core of the company''s operations at the time, gave the Board the
comfort needed to support the deal.  The outcome was firstly a stronger resin
business and secondly, the catalyst to build what is today a successful
Specialty Products business. Later, we were privileged to have Polychem
become a member of the Nuplex Group. This outstanding company with a history
almost as old as Nuplex, together with its sister company in Australia,
Multichem, added significantly to the Specialty Products portfolio. A
substantial business has been built that complements Resin operations,
strengthening the Group through industry diversification.
It represents the fourth defining point. Fred''s ability to appropriately
reflect these quite different business opportunities to his fellow directors
was certainly pivotal in their understanding of the potential, and backing,
for these acquisitions.

The merger of Akzo Nobel Coating Resins with the Nuplex resin business was
the fifth defining action for the company.  Sales almost doubled, profits
required considerable improvement but this was achievable, headquarters were
in the Netherlands with sales and production facilities in many countries
where we had not previously operated.  Again, Fred''s ability to properly
estimate our own management strength, to understand the business and its
opportunities, to appreciate the real underlying strength in its operations
and people, and to comprehend how the merger of the two businesses could be
done - and prove successful - were key elements in bringing the Board to
understand the major strategic benefit of this purchase.

Today marks the end of an era.  Fred, as the company''s second Managing
Director and third Chairman, your mark on the company is indelible.  You will
be remembered by us as much for your demeanour and for being a great bloke,
as for your substantial contribution to the business of this organisation.
You have been well supported by your wife Celeste and your very close family
and we are privileged to have them here today. Celeste''s contribution to your
success, and to Nuplex''s, has also been considerable -_ thank you Celeste.

Fred, on behalf of all Nuplex stakeholders - congratulations and thank you
for a job well done.  A fine career.
End CA:00172182 For:NPX    Type:ADDRESS    Time:2008-10-31:09:20:50
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