Wellington, April 23 NZPA - The New Zealand Refining Co is no longer enjoying the high margins of recent years, shareholders were told at its annual meeting.

Chairman David Jackson said that as the world economic recession bit, demand for transport fuels reduced worldwide, at the same time as additional refinery capacity was coming on stream resulting in an international surplus of refined products.

"This imbalance between supply and demand, has resulted in a downward pressure on margins, signalling to us that the high margins we have enjoyed over the last three to four years are no longer the current reality," Mr Jackson said.

While the company could not predict future demand, refining margins or exchange rates, it had developed a long term strategy to help ensure it was well resourced to be able to capitalise on market opportunities and remain robust during all business cycles.

"We have had a good year and we are confident about the long term future for refining in New Zealand, despite the cyclical nature of our business."

For 2008, the refining company reported a net profit of $124.9 million, an increase of 11 percent from the previous year.

Mr Jackson said increased refinery capacity from the Point Forward Project at the Marsden Pt refinery, near Whangarei, would be available towards the end of this year.

By retrofitting new technology into the original crude distillation unit built in the early 1960s, the company could increase its crude processing capacity and increase the business by around 15 percent.

Most of the large equipment was already installed on site and remaining tie in work would be completed in September and October when the refinery was partially closed down for planned maintenance.

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