Whakatane Paper Mills

Bay of Plenty Beacon, Volume 1, Issue 91, 22 November 1939, Page 5

Whakatane Paper Mills

SHAREHOLDERS' AMUAL MEETING

THE NEW ZEALAND MARKET

VAST PROSPECTS OF NEW INDUSTRY

A keen note of enthusiasm pervaded the annual meeting of the shareholders of the Whakatane Paper Mills, which took place last Monday. The Manag-ing-Director, Mr H. A. Horrocks, presided over approximately 60 persons, and the general impression gained was that the experimental stages of the new industry were now passed and that i;he. company was about to reap the benefits to which it is just"ly entitled following the long period of preliminaries. The main point of interest was the effect of the new restrictions on the production of cardboard, and there was an optimistic outlook on the part of shareholders in view of the protected market now at their disposal, and the prospects of a steady demand for board in future. A survey of the ■ general manager met with full • endorsement and the entire business of the meeting was completed in approximately two "hours.

Chairman's Remarks,

In throwing the report open for "tlisciission, the chairman detailed some of the main features leading up to the present state of operation. They had anticipated getting into production last New Year, but actual ly had not been able to get under way till after Easter. Even with ' this done the company had to close down plant again and had not recommenced till July 20. Since JuV, the figures Im-I shown a steady advancement till at the present mo'm.crif reduction was in the vicinity of £4000 per week (approximately '£700 per day). For the first eight weeks approximately 739 tons had l>een manufactured giving a weekly average of 92 tons. In the next eight •weeks (till November 4) over 100Q tons had been turned out and the weekly average rose to 127 tons. Dur ing the past fortnight no less than

326 tons had been manufactured bringing up the weekly average to 188 tons.

The steady improvement had Ijee-n due to the increased ciency of the men handling the! product, and it was anticipated that it would still further im-

prove as time went on. Though 200 tons per week was only half the theoretical capacity of tho plant shareholders would be entitled to look forward with confidence to „ further production. It was necessary to have the utmost co-ordination between all departments. There were now thirty men on the shift: and unless all those men tied in with

iheir activities very closely, a lot of tonnage could be dropped in a very short time.

The total 2000 odd tons manufactured to date valued approximately £44,000. The machine had not so far "been'run in excess of 132 ft per minute, but actually it was designed to run double that speed which would mean double the tonnage. Effect of Restrictions. Referring to the Government restrictions. Mr- Horrocks said that for the duration of the war, the Government had decided as a national po- ~ Key that the mill should meet the entire requirements of boxmakers and printers in New Zealand. It would be necessary to satisfy this demand before any permit could be given for export. The requirements for 1940 were estimated at 15,000 tons and that was what was expected of the plant to give the Dominion full coverage. The arrangement was an excellent one for the Government, which was short of sterling, the plant obviating the necessity of finding £300,000 per year for imported board. The maintenance of the plant was also vital to the box-makers themselves, as dining the war the difficulties of getting supplies increased. Government Investigation.

The company's operations had been subject to very full investigation and prices in future would probably be guided by Government policy. It therefore became impossible to predict what degree of profit the works

would be allowed to earn during the war but payment of debenture interest became absolutely assured. Shareholders who had taken out debentures were in a happy position, for if their interest was not paid or provided for they could compel production to stop. Such action was of course not suitable to the Government or to the boxmakers. As to what profit was over after debenture interest had been made, this was a matter beyond the companies control while the war lasted. London Indebtedness. Referring to those London firms which supplied equipment, and to which the company owed approximately £7;"5,000j Mr Horrocks said that the Reserve Bank had agreed to make available exchange to the extent of £40,000 for transmission, of which £20,000 would be available in March next year and £20,000 in April. The British interests would be then asked to wait for the balance of their money of which it might be possible to supply a further £20,000 next September, and the balance in 1941. To enable this remittance to be made it would have to be secured by the release of debentures, and shareholders would be given the opportunity of taking up a further £40,000 worth between March and April. The Employees. The staff now totalled 232. The wages per week were £1400. The employees could be roughly divided into the following groups: Forest 48 (Matakana Island), Mill 125. Office 20, Capital Work 30; and Gen eral 9. The dispersal of the wages money could be apportioned as under: Log ging £240, mill £3000, administration £150. The company had further become quite a valuable cog in the railway system, the railage account being recently as much as £700 per week.

Brighter Prospects. Though shareholders as a whole were not satisfied with the tonnage coming from the mill, he thought that the results were good. The men were on the whole keen and shaping well. The biggest strain was on- the administration heads and to them he conveyed his thanks and appreciation for their long hours worked and their application to the job. Tribute From Shareholders Mr T. A. McCarroll of Thames said he was voicing the opinion of shareholders in congratulating the chairman and the directors in at Inst getting the. wheels going. Many had had their money frozen and tied up for a considerable period but now they were beginning to see the culmination of their efforts, and he would like to record his appreciation. He asked just how far the Government intended to control operations, and wondered how it would effect shareholders. From what the chairman said it would appear that the policy was a good one, but there were other instances where Government policy had not been an unqualified success. trusted that their interests would not be neglected by the directorate.

Mr McCarroll in asking a number of questions about the balance sheet suggested that it would give a feeling of confidence to shareholders if the directors could indicate a likely dividend.

Ta response to this Mr Horrocks said ' that under the circumstances obtaining to-day it was impossible to attempt any forecast. They would have a much better idea after operations had been in force for twelve months.

Lone Interjector.

Mr Horrocks was in the process of explaining the heavy wages bill, pointing out that the average wage was over £5 per week, and that arguments were now being put forward for a fortnight's holiday per 3 r ear, on full pay, when an interjector from the rear- of the hall sug gested getting on with the meeting.

Mr Horrocks explained that share holders were naturally interested in the wages paid to employees.

Tiic interjector, who maintained that he Avas a .shareholder, said there was too much picking on our fellow men going on in the world to-day and that no good would come of it if the meeting was to assume a political attitude. V "I'm quite sure no one else thinks that I am attempting to run these men down," said Mr Horrocks. "I'm only sketching the position for the benefit of the shareholders and if you are not interested I'll have you put out." There were no further interjections. Continuing, Mr Horrocks said that the Avages and conditions were good in the mill and he held quite a high opinion of the employees, who were keen on their work. There was quite n healthy rivalry between shifts. Talking of profits in the face of the high wages however, he did not think they could expect them for some time. Speaking on the same subject Mr McCarroll! said that, provided thof men were definitely free from outside influences, there was not a more contented lot of men in New Zealand. Bound To Go Up! In answer to Rev. W. H. Spear's enquiry as to the possibility of the board going up, Mr Horrocks said he could say very definitely that it would. Mention of the Kauri Timber Com pany's rights to the Rimu timber in the company's bush at Matahinn, was made by Mr Geo. Barclay of Te Aroha, who asked if the remaining Tawa was valuable for pulping.

Mr Horrocks replied in the affirmative, reiterating Professor Corbin's statement that there was 120,000,000 feet of Rimu in the bush and approximately four times as ran eh Tawa. To Mr Barclay's further query as to whether it was cost ing more per cord to bring the pinus from Matakana, Mr Horrocks agreed again saj'ing that the figure was £3 or just double what hud been anticipated. Owing to the impossibility of making suitable arrangements for barging direct to Whakatane, the logs were shipped to Tauranga, then transported by rail. The cost was also influenced by the fact that they were only cutting selected trees—and in effect virtually thinning the plantations.

Mr W. W. Main gay (Te Aroha) asked liow long it would be before the company cut its own timber. Mr Horrocks: Not for another 3 to 4 years! Mr Maingay: Why? t Mr Horrocks: It would be a pity to cut down trees under ten years old. I think the fifteen year cycle would be the most profitable. But at Pukehina we could work on a ten year cycle. The report and balance sheet were then adopted by unanimous vote. Election of Directors. The retiring directors by rotation, were Messrs R. W. S. Dickson, G. O. Gibbs, and S. J. Fortescue, all of whom offered themselves for reelection. In addition' further nominations for the positions were received from Messrs D. J. AVesnev (Jnvereargill), C. Fisher (Adelaide) S. E. Johnston (Perth). The ballot was conducted with Messrs McCarroll and Maingay acting as scruitineers. Owing to the necessity of checking up on votes by proxy, the result of the election Avill not be made known till some future date., The directors remuneration was fixed at half the figure obtaining in the past (£200). The decision was reached following a voluntary gesture from the Australian directors to reduce their remuneration to £100. An amendment moved by Rev. W. H. G. Weadon (Paeroa) that the fee be limited to £50 was defeated by a large majority. Mr McCarroll (Thames) suggested a remuneration based on the scale of production of the mill, at Is per ton, but withdrew his proposal in the face of general expressions of disapproval.

Messrs Robertson, Crane and Gibbons of Sydney were re-appointed auditors, following the manager's statement that it was necessary to make an Australian appointment owing to the fact that the company was registered there. The question of settling the fee was left to the discretion of the directorate.

Recommendation and Confidence.

On the motion of Mr McCarroll it was recommended to the direc-

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torate that a fee of 10s be charged in connection with the transfer of shares in future.

In closing the meeting Mr Horrocks said that he trusted next year that the figures would be more interesting. Returns had been a long time coming but he Avas satisfied that they now had overcome the initial operations and were well on the way to steady production and

financial success.

A motion of appreciation to and confidence in the directors and the general manager was carried by acclamation.