ANNUAL REVIEW

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

ANNUAL REVIEW

PLANT NOW COMPLETE SURVEY OF PROGRESS The annual report, submitted to th< meeting of shareholders last Monday covered fully the immense operations of the company. Details were a.s under. Whakatane Works. Capital expenditure thereon has totalled £525,374 IDs Bd, and the Avorks are noAV practically complete. The period taken to run the plant in has been approximately four months, so that it Avas not until the middle of July production on a commercial scale substantially commenced, since Avhen the mill has been running three full shifts covering 132 Avorking hours per Aveek and providing steady employment for approximately 170 men. As yet the daily tonnage is of necessity Avell beloav the rated capacity of the plant, but a gradual improvement can be expected during the ensuing feAV months as mill operatiA'es become more experienced, and the speed of the machine increased. A number of trial orders covering a Avide range of boards have been made and generally speaking Avell received by the trade. Insignis groundwood pulp is proving satisfactory and the future of this A\ T ood for pulp and papermaking purposes in the Dominion is exceptionally bright.

Import Restrictions: War Conditions

The New Zealand Government Exchange Control Regulations and Import License restrictions should enable the company to enjoy a steady and increasing demand for its products, and keep the plant working to capacity. As a war measure the Government has brought about cllose co-operation between the users of our products and ourselves and a special committee has been set up by the Comptroller of Factories for the purpose of co-ordinating the trades requirements for the duration of the war and ensuring adequate supplies of board for the New Zealand domestic market estimated at 15,000 tons per annum. Due to the probable scarcity of tin it is further expected many containers heretofore made of this material will require to be made of cardboard and that our internal consumption of board may increase beyond above figure "with advantage to your company. Debenture Issue. Pending the company's receiving a satisfactory assurance that sterling funds to repay the London Group will be available as required, the issue of debentures in New Zealand for such purpose cannot be made. The directors meanwhile, are therefore utilising subscriptions from New Zealand shareholders for repayment of the company's obligations withi'i the Dominion and reserving £80,000 of the issue for redemption of the London group's securities when the difficulties regarding exchange have been solved. Plantations.

The plantations are in a healthy condition and the trees are making wonderful growth. In their present condition it is estimated these forests contain no less' than 1,278,800 cords of pulpwood and the annual increment is estimated at 164,000 cords. Maintenance costs for last year show a further reduction of £662 at £4439. Depreciation on plantation equipment amounting to £767 is included in this figure.

Mafakana Island. Capital expenditure on wharf, buildings nnd tramlines ran into £7871 13s .3d. Logging operations commenced in April. Matahina Forest—7,ooo Acres. The property is now unencumbered. The proposal that the company should itself mill the Rimu on this block was consideration abandoned, and cutting rights over

this particular timber have been granted to an established sawmilling company instead. The terms of disposal provide for a substantial cash payment (since received), and the balance of the royalties are to be paid within two years. The Tawa, approximating 100,000 cords has been reserved by the company for its own use. Financial. Although the plant Avas started up in April, production on a commercial basis did not commence until July, so -consequentliy all expenditure for the year has in accordance Avith previous practice been capitalised. The cost of running the plant in, has therefore been charged to establishment account. Income received from invested funds has been applied to thv reduction of total expenditure. It is therefore not opportune to prepare a profit and loss account for the parent' Company or its subsidiaries, for the period under review ending June 30. Paid up capital increased by £32,452, and at June 30 AA r as £1,912,951, in respect of ordinary shares and £136,898 in respect of pre fercnce shares. Unpaid calls at 30th June amounted to £41,936. Depreciation amounting to £1448 has been provided in respect of olfice furniture and equipment, plantation machinery and equipment, and this amount has been capitaMsed partly to the appropriate departments of the company's activities and partly to establishment account.