Competitive conditions cause Colorpak profit drop

Folding cartons business, Colorpak, feels the pinch of tightening economy.

In its preliminary final report, the company’s profit for 2008/09 was down to $5,620 million, a 9.5 per cent decrease on the previous year’s result of $6.210 million.

Trading was ahead of the previous year until March 2009 but slowed down in the last quarter as customers reduced their inventory in reaction to the global recession. In a statement, the company said that it is remaining hopeful: “This inventory contraction is likely to be a short-term influence as the underlying demand for pharmaceuticals and consumer goods remains positive.” Revenue from the sale of goods and services amounted to $77.66 million; a minor drop of 0.2 per cent below the previous year. According to Colorpak's statement: "NPAT fell short of expectations, which reflects the competitive pressure in the sector in a low-growth environment."

The addition of another printing and die-cutting line to the factory in Regents Park, Sydney, is expected to enable further improvement to customer service and shorter delivery times throughout New South Wales.

Achieving FSC and PEFC in October 2008 along with ISO 14001 certification in December last year will continue to improve Colorpak's environmental performance. Alex Commins, managing director of the company, described the process of gaining ISO certification as long and difficult at times, but ultimately worth the effort.

“We have worked on this for 12 months and we were delighted to be advised by the independent auditors, Lloyds of London, that we had met all the criteria,” Commins said.

Looking to the future, Colorpak expects “modest growth in sales” and profitability for the 2010 financial year.