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Fisher & Paykel Appliances (F&P) has increased the amount needed to invest in manufacturing facilities in the U.S. because it is being fined with import duties on manufacturing equipment made in New Zealand.
John Bongard, F&P CEO, told shareholders at the company's annual meeting that U.S. $8 million of capital would now be required for facilities to manufacture washing machines in the U.S., instead of the $5 million first thought.
"Since making the announcement, we've learned we're not eligible for a duty exemption on the plant entering the U.S.," Bongard said.
The New Zealand appliance maker designs its own manufacturing equipment and decided to manufacture in the U.S. because of the cost of freight for completed large appliances.
F&P was receiving a tax break in the U.S. market from a new law giving tax credits to makers of energy and water efficient appliances. Reports had estimated a benefit of up to $100 per washing machine, but Bongard said the full impact of the legislation would not be understood until supporting documents were released. The company currently estimated a benefit of $2 million per year for the next 2 years.
According to Bongard, F&P was on course to make a profit similar to last year, although the first half would be down compared to last year. "We reaffirm our previous earnings guidance for the group as being similar to that of last year," he said. (Manawatu Standard)
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