Move of Australian wine-bottlers offshore blamed for Penrice difficulties
Australian supplier of raw-materials for glass-makers, Penrice Soda Ltd has asked its shareholders to remain optimistic in spite of on-going economic difficulties in the company.
Penrice Soda has been experiencing significant economic difficulty in its three businesses; the sodium bicarbonate business, selective salt recovery business (which removes salts from coal seam gasses), and its quarry.
Shareprices in the company have fallen from $1.57 in 2008 to $0.05 at the time of the annual meeting, with unhappy shareholders suggesting a spill of the Penrice Soda board.
Penrice Soda is the only Australian manufacturer of soda ash used in glass production, particularly wine bottles, as well as washing powder, food and animal feed.
Chairman of Penrice Soda David Trebeck said in the annual general meeting this week that the soda ash sector needed significant improvement to amend “the inadequate profitability and cash flow” experienced for several years.
Mr Trebeck while attributing its waning soda ash business to the strength of the high Australian dollar and unreliability of its own manufacturing plant, acknowledged the impact of Australian winemakers and breweries having their products exported in bulk to be bottled outside Australia.
“By their actions, some of the larger winemakers seem to think it is sound business to export their product in bulk for bottling at a cheaper price overseas,” Mr Trebeck said.
“I do not suggest that the banks are happy with our performance: like everyone else, they are not. But they are realistic and balanced in their judgments. Their continued support is appreciated — and is valuable to shareholders,” he said.
It seems that despite the supposed popularity of glass as a form of packaging (see an earlier Australian Food News report), the manufacturing of Australian glass bottles has been in decline.