THE SUGAR INDUSTRY.

Dominion, Volume 5, Issue 1442, 17 May 1912, Page 11

THE SUGAR INDUSTRY.

ROYAL COMMISSION. THE COLONIAL SUGAR REFINING COMPANY, LIMITED. STATEMENT BY GENERAL MANAGER. The figures relating to profits now quoted by tiie C.S.H. Co. are open to verification by the President of the Australasian Corporation of Public Accountants. THE INCIDENCE OF THE TARIFF. ". The direct protection for those engaged in the manutacturc of raw .sugar is .£2. This being the difference between the import duty on foreign sugar (.£0) and the excise duty on Australian sugar . From the sums collected as excise, tho Federal Government pay to the growers a bounty of some (is. per ton of cane in N.S.W., some 7s. per ton in Queensland. Tho ditl'erenco in the figures for the two States is accounted for by the greater sweetness of the Queensland cane. This equals about X'i per toil of raw sugar. Shortly stated, the tariff increasos tho price of sugar in Australia by M per ton. The cane grower gets £3 per ton The raw sugar manufacturers get" £2 per ton The revenue (partly for administrative expenses) gets £1 per ton The refiners receive no protection whatever.

HAW SUGAR MILLS. The C.S.I!. Co. have 40 years' experience in working sugar mills. As such machinery loses its selling value in 20 to 25 years, 1 per cent, on the original cost is required for sinking fund. The experience has been that after allowing, as above, for depreciation, the return over the last five years lias been only about 7 per cent, on the capital invested in sugar mills in Australia. The C.S.I!. Co. pay higher average rates than the Queensland Government Central Mills for their farmers' cane crops. Tho respective averages for tha past 10 years being;— C.S.K, Co., 15s. 4|d. per ton. Queensland Government Central Mills (vide Auditor-General's report), lis. lljd. per ton.

The experiment of State control of sugar mills has not proved successful in Queensland. The latest report from the Audi-tor-General of that State shows that of tho total amount—.£s9s,B3o—advanced (mostly in ISUS-1596), some .£337,339 was still outstanding, while the arrears of interest amounted to .£26,579.

The C.S.H. Co. do not grow sugar oane in Australia. They are merely millers and Tenners. REFINERIES. The Company seek 10 per cent, gross profit on their investments as refiners. 10 per cent, profit is about .£1 per ton on the capital invested, or 5 per cent, on their selling prices in Australia, Tho actual experience is that only some IGs. per ton— i per cent on their selling prices has been obtained during recent years from sugar purchased in Australia. Except for the difference in duty, sugar costs less at Sydney than in London. Sugar is duty free in New Zealand. New Zealand prices arc consequently lower tlnan Australian rates, practically to the extent of the duty paid there.

THE COMPANY'S METHODS. One of the main factors in the success of the Company has been the payment of outside liabilities with funds provided •by the shareholder. Since 1890, when this policy was adopted, the undivided profits have boon loft in the business, the expansion of which has provided a remunerative outlet for such funds. Chemical control of the manufacturing processes has been another "secret of success." This system has been developed (luring the past 30 years, and now costs .£20,090 per annum. 'The resultant savings have been verv great. Tho better control in 1910 resulted in 0185,000 worth of sugar being "saved," compared with the method of 10 years previously; and tho difference exceeds by ,£250,000 tho results obtainable with the methods used 25 years ago. All this, irrespective of protective duties, or of the price paid for the raw material, or of the rate received for the refined sngar.Thero is still a largo scope for savings by the further application of the latest methods of chemical control. THE COMPANY'S POSITION AS BUYERS AND SELLERS. "It is an axiom that a business without direct or indirect tariff advantages cannot be worked to tho disadvantage of i>. 'community'." Of the raw sugar produced in Australia onlv about one-third is made at the C.S.K. Co.'s mills. As Refiners the Company pavs .£[> per ton import duty on foreign raw sugar, or £i per ton excise on Australian raw sugar. The Australian manufacturer of raw sugar receives a higher rate than the foreigner to the extent of the difference between the import and the eicisa duties. The actual additional cost of Australian raw sugar bought by the Company during the years 1906-1910 has been £2 R Bd. per ton. THE EMPLOYEES' PROVIDENT FUND. This was inaugurated 22 vears ago. Equal participation is open to all permanent employees—staff, or wage-earners. Its administration is upon demooratio lines. Of the S Trustees, 2 are elected by the staff, 2 by the local wage earners, and the General Manager of the Company represents the subsidy granted by th'e Company's Directors.

The Company are now paying over ,£7OOO per annum as direct subsidy, and nearly ,£3001) per annum additional .is supplementary pensions. Mr. Knox (General Manager, G.S.R. Cu.) added: "Like every other employer in "Australia, what "the Company most "wants ts to be left alone so long as its "actions uro in conformity w,ith tho "law."