By ALAN WOOD - The Press Friday, 4 May 2007
PLASTIC MAN: Canterbury property investor Graeme Wong is branching out into the palstics industry.
Entrepreneur Graeme Wong is diversifying from property projects into what he hopes will become a building block of the future – plastic pallets.
He has a couple of South Island subdivision projects on the boil but is focusing his energy on Icepallet – a company started in Australia by Kiwi industrial chemist Brett Boag.
The light plastic pallets were more easily stacked in space-saving form when used in ships' holds, Wong said as new chairman of the company.
However, they were "three times the price" of the wooden pallets that were produced in bulk by industrial giants such Brambles.
The plastic pallets – with a life expectancy of at least five years – were not only durable, but were less likely to be contaminated by insects or chemical residue, and their embedded tags could easily be tracked, Wong said.
He and other directors, including Mark Ching, were looking to take Icepallet from startup to the next level. The first commercial order had been shipped from China, but it was too early to release financial targets, Wong said.
"We're in the process of putting together the capital structure. A little while ago the guys asked me if I wanted to come on board as a director and I said I would if there's an opportunity to invest."
Wong, a former Brierley Investments Ltd executive has been involved in such projects as the Pegasus Bay township, 20km north of Christchurch and has a stake in an Omaha Beach subdivision de- velopment, north of Auckland.
The holding company for those projects, Southern Capital, is in the process of being wound up.
After being listed as Hirequip, the hire assets were sold to Pacific Equipment Solutions Finance, a Japanese private equity group.
Stuart McKinlay and Trevor Scott – two Hirequip directors – banded together to buy Southern Capital's legacy assets, including some remaining property.
Given that the sale prices had been agreed, Wong said he had worked out the profit of a shareholder who had bought into Southern Capital at its formation in December 1997.
If a shareholder had invested $100 in the initial offering of Southern Capital, they would have received an annualised compound return on investment of 36 per cent per annum before tax, he said.
Wong is working on two land developments in Queenstown and Wanaka – each between 12 and 20 lots worth between $1m and $2.5m.