Latest / Best of Business / Dave Slomp: McKechnie Aluminium Solutions managing director on the concerns impacting the aluminium sector

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Dave Slomp: McKechnie Aluminium Solutions managing director on the concerns impacting the aluminium sector · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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• 0:16
  Speaker 2: Now, our aluminium extruders say that their industry is in
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  Speaker 2: real danger and the government has refused to help. The
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  Speaker 2: Aluminium Extruders Association says state-subsidised Chinese extruders have been dumping
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  Speaker 2: their product here cheaply, making it impossible for our local
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  Speaker 2: industry to compete. They've asked the government to put in safeguards,
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  Speaker 2: but the Minister, Cameron Brewer, has refused to do it.
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  Speaker 2: Dave Slomp is the Managing Director of McEachney Aluminium Solutions
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  Speaker 2: Limited and he's with us now. Hi Dave.
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  Speaker 3: Hi Heather, thanks for having me on the show.
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  Speaker 2: Yeah, you're welcome. How disappointed are you that the government's
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  Speaker 2: not doing anything?
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  Speaker 3: Well, it's a dark day for the industry and I
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  Speaker 3: guess we're disappointed that we haven't acted with pragmatism and courage.
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  Speaker 3: So yeah, a tough day for the industry, Heather.
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  Speaker 2: Has he explained why he's not doing anything?
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  Speaker 3: Well, the Minister took advice from MBIE, so I guess...
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  Speaker 3: Our beef is with the advice, really, and the MB
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  Speaker 3: in their report acknowledges that the domestic industry has suffered
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  Speaker 3: serious industry, but they kind of minimise the role of
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  Speaker 3: imports in this, saying that a contracting domestic market and
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  Speaker 3: cost increases are more important. And so from our perspective,
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  Speaker 3: we agree that the market's been tough, but we're all
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  Speaker 3: longstanding business, and we've had plenty of economic ups and
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  Speaker 3: downs in the past. COVID, GFC, oil shocks, and many,
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  Speaker 3: many more. So to give you an idea, McKinney alone
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  Speaker 3: has been around for 75 years. But this is a
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  Speaker 3: little different than standard economic ups and downs. What we're
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  Speaker 3: seeing here, Heather, is finished aluminium extrusion coming into New
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  Speaker 3: Zealand for less than the globally traded price of the
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  Speaker 3: raw materials that we've got to buy to make it.
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  Speaker 3: And so MBIE completely underestimates and understates the impact of
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  Speaker 3: this to the point where Price suppression didn't even make
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  Speaker 3: it into their executive summary.
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  Speaker 2: If there were safeguards put in place, what would they
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  Speaker 2: look like?
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  Speaker 3: Well, they would be nuanced and targeted at the lowest
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  Speaker 3: price product that's injuring the industry. And to give you
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  Speaker 3: an idea, from 2015 to 2025, we saw an increase
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  Speaker 3: in market share of imports from 5% to 25%. And
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  Speaker 3: this year, year to date, it's looking more like sort
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  Speaker 3: of 33% of the market is going to be imports. And,
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  Speaker 3: you know, we look at that and we go, if
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  Speaker 3: that's not evidence of serious industry, what is? Okay.
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  Speaker 2: Now, if you had to put your conspiracy theorist hat on, Dave,
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  Speaker 2: and say why you really think the government is refusing
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  Speaker 2: to do something, what would it be?
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  Speaker 3: Well, I guess we're very aware of... the relationship with China.
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  Speaker 3: We're very aware that we have a world-class primary industry
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  Speaker 3: and we're very aware that that could result in trade
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  Speaker 3: retaliation or at least the threat of trade retaliation. And
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  Speaker 3: so I guess we're not looking for protection as such.
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  Speaker 3: We're a world-class industry that can compete with anyone in
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  Speaker 3: the world under fair trade conditions. And we do get
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  Speaker 3: that We do get that the government might be a
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  Speaker 3: little risk-averse around the Chinese sales of dairy and so on,
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  Speaker 3: but Australia, the US, Europe, the UK, Canada, all have
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  Speaker 3: very strong trade relationships with China as well, and it
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  Speaker 3: hasn't stopped any of them from acting. Australia, for example,
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  Speaker 3: sends 36% of its exports to China, and they put
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  Speaker 3: in trade remedies against aluminium. Aluminium's one of the most subsidised...
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  Speaker 3: industries in the world, our exports to China are around 25%.
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  Speaker 3: It hasn't stopped Australia from acting, and it shouldn't stop us.
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  Speaker 3: We shouldn't throw one world-class industry under the bus in
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  Speaker 3: order to save another one. That's just protectionism by another name.
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  Speaker 1: All right.
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  Speaker 2: Listen, thank you very much for talking us through it, David.
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  Speaker 2: I do appreciate your time. Dave Slomp, Managing Director of
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  Speaker 2: McKinney Aluminium Solutions Limited.
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