THL announces Joint Venture Manufacturing business

Media Release

Tourism Holdings Limited

21 February 2012

thl announces Joint Venture Manufacturing business

thl today announces that it has entered into a series of agreements to form a joint venture manufacturing business in New Zealand with Kea Manufacturing (New Zealand) Limited (KMNZ) called RV Manufacturing Group LP (RVMG). Kea Manufacturing is a separate entity and business to Kea Rentals.

Grant Webster CEO of thl said “From a business perspective this provides an outstanding and rare opportunity to create a positive step change in the cost and efficiency of manufacturing RV’s in New Zealand. Taking both businesses skills and experience into one environment creates a platform for strong profit growth.”

RVMG will commence as a 50/50 partnership between thl and KMNZ.

Mr Webster said: “The high New Zealand and Australian exchange rate is impacting tourism. The reduced visitation from European and UK markets has resulted in a reduction in rental motorhome fleet sizes in both New Zealand and Australia. As a result thl is pushing ahead with definitive changes to improve the business. “

Mr Webster commented that “We have explored a number of alternative options and this joint venture provided an opportunity to ensure thl continues to have some ownership in manufacturing in a profitable manner and retains control over its destiny for the price, quality and design of its motorhomes and campervans.”

thl will retain the Motek brand and continue to market products under that brand for vehicle sales.

As a result of the transactions, RVMG’s primary manufacturing facility will operate from the existing Kea Manufacturing plant in Auckland (Albany) and the specialist and body work business will operate from thl’s Motek Specialist vehicles site in Hamilton. thl’s motorhome assembly business in Hamilton will be closed as a result of the joint venture.

Motek Specialist Vehicles will revert to its previous name of Action Motor Bodies.

The thl businesses in Hamilton employ 127 people of which 63 will be made redundant.

Mr Webster said: “For the 63 affected we are in a position where we have 24 different roles (primarily in Auckland) on offer and we have also created an opportunity for an additional 20 plus people to take a contract role in New Zealand or Australia for a period of months.”

RVMG will be led by Grant Brady, the current Managing Director of Kea Manufacturing, reporting to the board of the joint venture.

Details of the transaction have been included in an NZX release and more comprehensive commentary will be provided in the thl half year result pack which is due to be released to the market on Thursday 23rd February.

Announcement authorised by:

Keith Smith
Chairman
Tourism Holdings Limited

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