TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 34

COURTAULDS GROUP ( MP NIGHTINGALE)

BRIEF 3 PART III

Courtaulds are the largest textile group in Europe with interests in the whole range of textile and clothing manufacture and i other activities eg chemicals, plastics and packaging. In the year to March 1980 total sales were £1,819m of which £914m were UK sales and £493m were exports from the UK. Pre-tax profits were £68m, a little more than the previous year, but the Chairman recently warned that a serious decline was in prospect for the current year. He attributed this mainly to the increasingly difficult trading conditions in fibres and fabrics, where a slump in home demand coincided with strong competition from imports and difficulties in exporting due to the strength of sterling•

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Present company policy is to try and improve productivity further and concentrate resources on the strongest business. This has meant an extensive programme of closures and redundancies. Of 350 Courtaulds sites in the UK, over 50 were closed in the year to mid 198 Over the same period, about 15,000 workers became redundant, and the present workforce of about 86,000 is expected to contract by another 5,000 or so before the end of 1980.

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Courtaulds Fabrics Group produces a very wide range of woven and knitted fabrics for the apparel, furnishing and automotive industries and many other industrial customers. In 1978/79 the Fabrics Group made a trading profit of £14m on sales of £483m. addition to fierce competition from imports from developing countries, Courtaulds products faced increasing pressure from US fabric producers who benefit from greater economies of scale, cheaper yarn due to controlled energy and feedstock prices, and the dollar/sterling exchange rate. The strong pound has also. hampered exports. Courtauld also drew attention to the current slackness of home demand due to the

rise in VAT and high interest rates. Fabrics have taken their share

of closures and redundancies as part of Courtaulds' plans for rationalisation, and overall numbers employed fell by 2,000 to 22,000 over 1978/79. Meanwhile, the development of new products and markets has continued and investment to secure gains in productivity has taker place. In particular, there has been re-equipment in warp knitting, and programmes to improve corduroy finishing and polyester weaving.

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The Household Textiles Division continued to do well in furn-

ishings, towels and some bedlinen products but some sheeting lines. suffered badly from the adverse trading conditions.