GOLF BALL MAKER SHEDS ITS HANDICAP

shoes), and Repco and Malvern Star (bicycles).

The group has formed strategic alliances with other overseas companies, and, among other rights, can now import and distribute Raleigh, Peugeot and Diamond Back bicycles and Taylor Made golf clubs. As part of Pacific Dunlop's Pacific Brands division, the group also supplies Adidas and Dunlop Slazenger goods to New Zealand.

The group has 25% of the lucrative and high-profile Australian sporting goods market, including 30% of tennis balls (80% of championship balls), 25%of golf clubs, 30% of golf balls, 35% of tennis racquets, 50% of bicycles and 70% of golf shoes.

The group has changed dramatically since Moore joined four years ago. He has expanded it -- Malvern Star bicycles was added in 1989 and South Pacific Cycles in 1991 -- but believes other changes will have greater impact.

Over the past three years he has closed four manufacturing divisions -- a tennis ball plant in Alexandria, Leisure Cycles (part of Repco) in Adelaide, Adidas footwear in Melbourne's Ferntree Gully and an exercise-bike plant in Melbourne's Huntingdale. Staff has been cut from more than 1000 to 560. "I hated it, but you have to look to the future," Moore says. "We would not have been competitive if we had not made the decisions."

The change was inevitable. Australian plants that produce goods requiring a high labor content cannot compete with plants in Asia. "Tennis balls, for instance, require a much higher labor content than golf balls. We simply could not continue to produce tennis balls."

The company has beefed up its marketing and selling resources over the past three years, improving warehousing, computers, clerical work and asset-sharing between divisions. "Turnover has remained the same while staff has halved, so we have gained a lot in efficiency," Moore says. "The important thing to remember is that we are in an international market, and if we cannot compete internationally we will not survive."

Moore, who is based in the Pacific Brands head office in North Melbourne, says he has learned lot from the recession. "We will come out of the recession with a much better business," he says. "There is less forward ordering by customers these days, which means we have to get better at forecasting and development I Prices have become more competitive and we are looking more at value for money. Because sales growth is not necessarily there now, we have become more conscious of costs. We are now tighter, leaner and better-positioned to take advantage of any recovery when it comes."

Its brand names are the company's strongest asset, and the potential strength of its markets is undeniable. "Cycling is a growth sport, as are golf, tennis and jogging," Moore says. "Cricket and football remain old-time Australian favorites. There are great opportunities for us to grow."

He says there are signs of recovery: markets are starting to loosen up; retailers are building stocks; and customers are responding to lower prices, for example, snapping up sets of golf clubs reduced $100 to $299.

Although there are no cast-iron plans, Moore is looking for complementary businesses to buy into. The Slazenger and Dunlop names could fit neatly into expanding baseball and basketball markets. His problem is that there are not too many choices because of Pacific Dunlop's dominance of the domestic sporting goods market.

The group's size and market share is a strength and a weakness, he says. "Obviously it's nice to have market share, but competing with myriad smaller producers means that we can easily get complacent. Spalding is big competition, but then there are lots of other suppliers with sales of less than $10 million. There are, for instance, about 40 groups importing golf clubs to Australia. It's important that we remain service and quality-conscious."

The company's warehousing, selling, marketing and administration operations are mainly in Melbourne -- Adidas in Mulgrave, Repco in Huntingdale, Malvern Star in Brooklyn, and Niblick in Clayton. Completing the group is Dunlop Slazenger, at Alexandria, and Dunlop Slazenger and Adidas, in New Zealand, where they share facilities in Auckland.

The group has kept three manufacturing plants: the golf and squash ball plant in Alexandria; the 5500 square metre Adidas clothing plant in the Melbourne suburb of Dandenong (it makes 5000 garments a day); and a tennis ball plant in the Philippines, an hour's drive from Manila.

The Philippines plant -- a joint venture with BTR Nylex, which owns the rights to Slazenger in the United States and Europe -- can make 31 million balls a year and supplies markets in Australia, America and Asia.

The Adidas clothing plant, despite its high labor content, is in Australia to stay. "We make a lot of small orders for different groups of people and these are impossible to import," Moore says. "In addition, Australians like different designs and colors to Germans. It's not possible to simply import the German summer range for our summer six months later. The clothing industry can have two fashion changes in six months."

The group's margins have come under pressure during the recession because of the public's increasing reluctance to pay high prices for sporting goods. "Although Australians still want to play sport with brand goods, they are becoming more conscious of prices," Moore says. "Athletic footwear apart, we are now selling our goods at lower prices than we were three years ago. People are still prepared to spend $150 on a pair of running shoes because of the more complicated technology."

Pacific Dunlop will continue to pump money into golf ball manufacturing. During the past two years, $750,000 has been invested in its Alexandria plant, including a new ball-painting system, eight-color printing, and handling equipment. The eight-color printing has been popular with tourists, who seem to have insatiable demands for golf balls sporting pictures of koalas and the Sydney Opera House. "Print the boss's face on the ball and belt the hell out of it," Moore suggests.

He says golf is the most dynamic part of the group: "Golf is the sexiest part of our business. It's a middle-to-top income-level game so our profile is higher than our sales. It is certainly a side of our business that is improving every year."

There are other plans for expansion. Niblick, the golf shoe manufacturer Pacific Dunlop bought from Harvey Neale in 1988, is preparing for an assault on the US market and expects to sell 150,000 pairs there in 1993-94. Niblick shoes are made in Taiwan and China and are marketed in Australia, Britain, Singapore and New Zealand.