INGREASE IN BUTTER OUTPUT

Franklin Times, Volume 9, Issue 736, 2 June 1922, Page 7

INGREASE IN BUTTER OUTPUT

NEW PLANT INSTALLED. THE PAST SEASON REVIEWED. IMPORTANT MATTERS DEALT WITH. MEETING AT PAPATOETOE. In his annual address to suppliers at Papatoetoe, Mr A. J. Sincla:-* (assistant manager of the New Zealand Co.op. Dairy Company) last Thursday laid considerable stress on the increase in the output of butter for the past year. He said that 16,000 tons were made as compared with 12600 tons for the previous year. The actual capacity of the butter branch of the business last year was 11,000 tons. Much extra monev had been spent to cope with the bigger output and the result was an increase of 50 per cent, .in the capacity of the butter-making plant entailing the expenditure of two year’s income. The company’s assets now amounted to £865,585. Regarding the factory to be built on the two-acre site acquired at Mt. Eden, Mr Sinclair said that it would not be a very big factory, plant being provided for turnover of about 600 tons of butter a year. Ultimately the Pukekohe factory would be scrapped and the plant transferred to a factory to be built on a newly acquired site at Paerata. The Paerata and Mount Eden factories would deal with the supplies now going to the Pukekohe central, milk and cream from north of Papakura being railed to Mount Eden. Some i'dea of ithe growth of the dairying industry was given by the fact that the 16,000 tons of butter exported this year by the company was more than the whole amount sent from New Zealand the year before the war. It was about onethird the present Dominion output. The quality had never been better. Last week a cable stated that the New Zeallland Anchor butter was realising 4s a hundredweight more than Danish.. It was 91.54 points perfection.

Mr Wright’s Good Work.

Mr Sinclair spoke of the good work done by the London manager( Mr J. B. Wright):, Since he took over the control many thousands, of pounds had been saved by the elimination of a number of recognised .iniquitous practices in the marketing. By means ol the daily account sales new made out, no adjustments were possible as between one merchant and another. He read a letter which showed that Mr Wright had brought about a *'4o shillings rise in ;he price of Anchor butter in a fortnight. He had accumulated a considerablfe stock in anticipation of the rise and began moving the price up 2s a day at first; then 2s in the morning and 2s in the afternoon still selling freely all the time ; and finaliv he managed to make a rise of 2s three times a day, so that the price reached 178 s and even went temporarily beyond that figure. Seventy thousand boxes of butter were sold in that fortnight. That price would go a tong way to dissipate the losses of the earlier part of the season, and at the t : me o i writing Mr Wright proposed to let the price then take its natural course. How the Price is Regulated. What was wanted was to get control of the 40,000 tons of butter being sent from New Zealand. The pool scheme aimed at that 1 . But it was not a trust or a combine. It had to compete on the world’s markets just the same as individuals. Mr Sinclair explained that the piics of butter did not vary arbitrarily. The best brand, he said,, would | generally bring about twice the pi ice : of margarine.. If the price fell below* that, according to the Taw of supply and demand, some people using margait, n would change over to butter; and if the price rose above, some of these who could just afford to buy the butter before would find it necessary to substitute • the' cheaper margarine. The Matter of Payments. On the early shipments of the season the company overpaid its suppliers to the extent of £70,000, but as only OFd a lb was later drawn on shipments that actually realised Is 5d a lb. considerable surpluses we: o to be expected bv the suppliers. It was decided that the butter-fat suppied from June Ist to August 31st must bear a premium of 2s a lb above the declared payment, j Although the January, February and March stocks of butter had. not yet been sold the speaker thought that from 1h 3 to Is 4cl would be averaged for the year. He .reviewed the butter equalisation fun:', and said that ft had been

brought to a satisfactory conclusion. For the coming season he said that a conference would be heftd quarterly, the ones for these districts, at Pukekohe, at which the suppliers’ committees would be given inside confidential information regarding the working of the company. Coal Supplies. This branch was very dmoortant. At Pukemiro the total expenditure would amount to £51,000 when the coal mine was completed. As the company had now to pay 28s a ton for its ,coaL and would be able to bring it out at its own mine at a cost of 8s >a ton the great saving to be effected was apparent—about £50,000 per annum. The demands of suppliers,! it was anticipated, would amount to another tons, making 100,000 tons a year. At that rate of working the coalfield would last 100 years. Regarding the box factory, the by this means, had suppied its factories with boxes from the Ist of August last and also made many cheese crates. The boxes had cost 2s each. / Trade and Loan Departments. In the trading branch the company had decided to handle only la ge lines such as manures, wire, grass seeds and benzine. The small 1 lines had been a source of constant erior. In the loan department a sum of £32,000 had been secured by way of bills of saVe on stocky but as there were a number of bad debts it had been decided to discontinue this branch and ma,ke no advances this season to help to buy cows. The losses referred to had been met; out of a special reserve fund. Retrenchment and Economy. Since December last 400 men had been retrenched, effecting a saving of £I6OO a week. About 75 per cent, of the men had, been dismissed in the building department, which was established in connection with the building of the large Wiaharoa factory. Mr Sinclair also spoke of economising among the heads of departments. There were five, he said, and supposing,, for the sake of argument, that they received no remuneration whatever he said that a saving of one-twentyeighth of a, penny per lb butter-fat would be made. They had as low overhead charges as any company in New Zealand. Mr D ruefi’s Suggestions. Mr Druce said : Last year’s bonus was paiid in three parts. As there are now 7000 suppliers and/ each cheque bears a tax a considerable saving would be made by having only one payment. It had also been decided to post the three monthly statements of the tests., and this yeat* that had meant a direct tax of 6s on every supplier. These used to be given out at the factory. Why not continue to do that. Mr Sinclair: The supplieis in some "stricts found that their business became too public if their statements were placed in then* cans. The company preferred to send the statements to the factories to be distributed by the managers. He would b.iing the matter up at the next meeting of direct',; s. The bonus was paid, in three instalments ns the money came to hand instead of holding it back until the total payments could be made. This Year’s Bonus. Mr Waters asked when the bonus for the past season would be paid. Mr Sinclair : A substantial payment would be made to suppliers in August. The average advance payment was about 11-hi-d, and at present the company’s money was all paid out. The payments would be earlier this year than for some time past, but it was not likely there would be a clean-up dn August. { Mr Heaven : The small advance payj ments made by the company this year were strangling a number ol ! suppliers Some companies made ad- | vances .of 15 per cent, at least more | than this company.- Were the butterfat suppliers acting as guarantors j and standing the responsibilities of I:he dried milk factories ? He gave two instances of factories making payments exceeding the New Zealand Co-op. Dai 'y Company’s payment [between; August. 1021 lf and April, ■ 1922. ! Mr Sinclair : Every h: anch of the ! business carries its own responsibilities. The Waitoa dried milk factory which, As the largest in the world, ; an d cost £IBO,OOO to put up, deals with the supply f.-om 10 000 cows, and the suppliers themselves give ’ guarantees to the hanks. These securities are valued at more than £?. 000,000 storing. Regarding the higher payments made by fee companies quoted, one of them had put all Us butter on the local me,"ket until the end of August, whereas id was on ita early supplies that the New Zealand Dairy

Company met with ‘its heavy losses. This was the first year for many years that the local market had beaten the export market. Mr Druce : A.e the late suppliers to claim the same price as those who get in early ? Mr Sinclair: The butter sent away early in the season was the butter that 1 made the losses. It brought | only lltid. That is what all the j suppliers should get for that part of the output exported. The surplus would probably average up to the price all through the season. Regarding the Rid per pound call for the development of the coalfield the directors proposed to make the call for the next season as well to help to pay it off. After all the capital had been collected the directors would still l continue to make the lad a pound deduction on the new suppliers. There were 1209 new suppliers this year, and nt was not fair that the new suppliers could come in and reap the benefits that the older ones had paid fer without bearing their part of the expense. Mr Jackson : Does Mr Wright get a commission on the butter sold Mr Sinclair: No. He gets a salary of £ISOO a year. Mr Druce : At a meeting of suppliers to the Waharoa factory -t- was stated that first grade cream was m axed with superfine an making it into butter. I object to that piactice.'

Mr Sinclair explained that it was an isolated example,, and at the time the factory was handicapped by insufficient plant to cope with the two grades separately. That was an exception. The managers had instructions that they must not mix the grades of cream.

Mr Heaven : If butter that has been graded, as second quality at the factory is raised to the first grade at the grading stores,, will the supplier get any refund from the company, Mr Sinclair : The total quantity of second grade butter made .this year is only 7 per cent, of the total output. Cases in which the Government grader raises seccnd grade butter to first grade are extremely tare. On the average the suppliers are getting paid exactly for what they supply. Mr Jackson : Who did the coalfield belong to before the company took it over ? Mr Sinclair had forgotten the lady’s name, hut he had no doubt Ml Jackson asked because he thought that some of the leading Imen of the company had. profited by. the sale. He could assure him that such was not the case. Mr Jackson : Have the shareholders any provision whereby they can influence the policy of 'their representative on the N.Z. Board of Control ? Mr Sinclair : The shareholders can pass ..resolutions to be brought before the directors. The delegate takes his instructions from the directors, and the various comparres (have voting power in proportion to their size. Mr Jackson : Would it not be a good thing to look into the shi piling facilities ns well as the marketing facilities , Mr Sinclair: That matter would, of course, have to he investigated. At the close of the meeting a suppliers' committee was elected, consisting of Messrs F. M. Waters, W. T. S. Wilson and J. Cowan, with power to add a delegate representing the Mangere -interests. The committee would attend the shareholders’ meeting nt Hamilton. A hearty vote of thanks and confidence was passed to the directors and management.