COAL INDUSTRY

Evening Post, Volume CXVI, Issue 80, 2 October 1933, Page 12

COAL INDUSTRY

"FIERCE COMPETITION"

The shrinkage in revenue o£ the Puke-

miro Cpal Company, Auckland, since 1930, ■said the chairman (Mr. A. Howey Walker) 'is partly due to the general depression, but reduced earnings are also due to competition and price-cutting. "During ' the whole of the last financial year," he said, "price-cutting has been intense. Even if prices had remained at the level of former years, there would still be a heavy shrinkage in-turnover when trade is divided between the six mines bow operating in the Waikato, . . . "Representatives of all companies have met from time to time to consider a : method of economical marketing at stab- , ilised prices, but although much time and have been given to the problem no satisfactory settlement of trading conditions has yet been reached. Much criticism has been levelled at directors of coal, companies since the price-cutting compaign:'brought sales below the cost of •production, but it should be remembered ■ that in these matters it is not the major- • ity, but the minority, that controls the situation. In niy opinion, however, the time is not far distant when a compromise will be reached." Mr. Hendry Luke, chairman of Wilton Collieries, made strong complaint of pricecutting. Referring to the merger of the Wilton and Renown companies/ Mr. Luke , said there had been fierce competition with .the object of driving the two companies t *«t of. business. However, it had the effect of driving them togpther in order to stabilise the finances of both com- . panics. He said the Wilton and Renown • companies would not go into liquidation and the present shareholding would remain ( the same. The new company, Renown Wilton _Coals, Limited, had taken, over the assets of the holding companies. The capital of the new company was £100,000, all held by the two con^panjes. The merger would enable considerable savings in office and sales expenses to be made. "If -this principle could be applied to the coal companies as a whole the industry .would be saved an enormous sum," isaid Mr. Luke. "Coal would be cheaper, it would be more payable to the companies, and shareholders also .would benefit. It would not be desirable for one or companies to close, work to be conUentrated on the remainder."