The Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH) share price is down despite announcing growth plans.
This company describes itself as a leading designer, manufacturer and seller of products and systems used for chronic respiratory care, surgery and treatment of obstructive sleep apnea. Its products are sold in over 120 countries.
Investment in further growth
The business said it has signed a building construction contract with Dominion Constructors for the fifth building on the East Tamaki campus in Auckland.
The building will have a total gross floor area of approximately 28,000m2 and it will showcase a mixture of spaces for research and development, manufacturing and distribution. Its design will reflect the “company’s culture of collaboration, with an open-plan work environment”.
The estimated total cost of the new building is expected to be approximately NZ$250 million.
The 42-hectare East Tamaki site currently has more than 3,900 employees. The new building is expected to accommodate the company’s growth in Auckland in the next five years.
Earthworks have been largely completed and construction will start later this month, with the facility expected to be operational in 2027.
The company also recently submitted a plan change application its additional New Zealand campus at Karaka, Auckland to accommodate growth over the longer-term.
Management commentary
The Fisher & Paykel Healthcare Chief Operating Officer Andy Niccol said:
We are excited to add this new building to complete our East Tamaki campus.
This project is a purposeful investment in infrastructure to ensure the necessary capacity and resources in New Zealand to progress our pipeline of innovative products and therapies.
Final thoughts on the Fisher & Paykel Healthcare share price
The business is one of the impressive examples of a New Zealand business that has very effectively grown its presence overseas.
The company has largely recovered from the boom and slump period of the COVID pandemic. It’s good to see management essentially believe the business needs to invest to cope with and take advantage of future demand.
I’m not sure if this is the best time to invest, with the Fisher & Paykel share price up 33% in the last year. However, I’d rather own this business than plenty others in the ASX 200 (ASX: XJO).
Even so, there are a number of ASX growth shares I’d rather buy.
