THAMES VALLEY CO-OP. DAIRY CO. LTD.

Hauraki Plains Gazette, Volume XXXII, Issue 4308, 24 August 1921, Page 1

THAMES VALLEY CO-OP. DAIRY CO. LTD.

ANNUAL MEETING LIQUIDATORS’ ADDRESS. The annual meeting of Shareholders of the Thames Valley Co-opera-tive Dairy Co., Ltd. (in liquidation), was held in the Theatre on Monday. The liquidators, Messrs G. Buchanan and W. Goodfellow, prepared an address, which was read as follows by Mr G. Buchanan: “I have much pleasure in moving the adoption of the report and bal-ance-sheet of the Thames Valley Coop. Dairying Co., Ltd. (in liquidation). The result of the pasLseason's operations as set put in the balance-sheet and accompanying statements is very satisfactory. z “It is now twelve months since the proposal that your Company should amalgamate with the New Zealand Co-op. Dairy Co., Ltd., and it was stated at that time that i„t was proposed that although the actual amalgamation would not take place until near the end of the season, the Company’s operations would immediately commence to work under the direction of Mr Goodfellow. “The Thames Valley branch factories have, .however, been working under the supervision of the officers of the N.Z. Co-op Dairy Co. during the past season, Mi’ W. ¥.» Kirkman being theusuperintendent, and Mr W. C. Dixon being the assistant superintendent, the latten gentleman devoting his attention to the supervision of cheese factories of the Company. “Weather conditions during the season were good orixthe whole. The spring, though somewhat late, brought a great' flush of feed, and it seemed as if we would have a perfect season, but in February a dry spell was experienced which lasted until early in May, which had the effect of cutting down the supply considerably.

“Shipping space was available throughout the whole season for butter, but owing to the strikes and the large amount of cheese held over from the previous season'which'had to be shipped prior to the new season’s make, there was a considerable amount of disorganisation in regard to the arrival of this product on the London market. In fact, there is a large quantity on the water at the 'present time, which, under normal conditions would have been sold before ■this.

The outlook for the coming season is •promising. The long period of dry weather in the Northern Hemisphere will leave the markers in that part cl the world very bare of dairy produce, and the result should mean satisfactory prices to New Zealand producers. “The birectors of the New Zealand Co-op. Dairy. Co. decided that the ’time wa-s opportune to send Mr Goodfellow to London to ascertain what could be done to improve marketing conditions. The wisdom of their action will doubtless be approved by shareholders, seeing .that we are now reverting to pre-war conditions, of marketing.

“The output of butter. 2643 tons, shows an increase of 965 'tons, and the manufacture of cheese, shows a decrease of 228 tons, the total output being 3378 tons. The increase in the output of butter is phenomenal, and to some extent is accounted for by the amalgamation of the New Zealand Coop. Dairy Company and the Thames Valley Company, in that the butterfat from the Glaxo Company at Te Aroha West, and also from the Manawaru cheese factory and the Eastport Road and "VVaitoa group factories, was dealt with for a considerable part of the season at the Waihou *factory. Notwithstanding this, there has been a vast increase in the amount of but-ter-fat produced for butter-making during the season. The decrease in the cheese output is due to the fact that a large number of factories ceased cheese-making in February, and on that date commenced to manufacture butter.

“The prices obtained for butter manufactured during the year have for the first time since the commencement of the wa l ' period been satisfactory to the producers, a sale having been effected to the Imperial. Government from September 1 .till March 31. Satisfactory arrangements were also made with the New Zealand Government for the sale of butter on the local market manufactured after March 31 up till the end of August. There ‘- has, however, been a phenomenal make of butter during the past winter, and there is a considerable amount oh hand now to be exported. A final payment or .88d per lb butter-fat (butter-making) for 1919-20 season will be made oh the 21st inst., or as soon after as possible, together with other payments as sec out in the N.Z. Dairy Company’s report.

“It is regrettable that the pay-out for cheese will be so disappointing this year, owing solely to the fact of the numerous freight charges during the year. The CompaiTy followed out their usual. custom of open consignment, and for the first time in -th? history of the Company’s operations this policy has proyed to be less successful than a direct sale. The freight and insurance charges alo.e amounted to I.Bd, and the charges at the London end amounted .to .7d per lb of cheese, whilst the actual cost of manufacture at this end amounted to approximately 1.45 d per lb of cheese. Taking these circumstances into consideration, it must be considered that the payments made are mose satisfactory, but at the same time it goes to show that the time is ripe for the producers and the Government to investigate forthwith the advisability of obtaining a shipping

line .to deal with thjp shipment of produce from New Zealand overseas. “The gross price payable for butterfat for butter-making will be approximately 2s Bd, and the average price for cheese will be.2s Id. The cheesemanufactured in February of this year has not been sold, it being now on the water, and has been taken into stock at lOd per lb f.o.b. The present indications of the market are that cheese should be worth considerably more than lOd, so that there should be a further payment to be made-to those factories which continued to manufacture cheese after February 1 of this year. “The dried mi,lik factory at Waitoa, is nearing completion, and it is anticipated that at least three units will be working in September next. “The Staff.—The work of the staff in the various factories this year has been very strenuous. In some cases double the amount of butter and cheese were manufactured 1 that the factories were intended to deal with when originally built. Notwithstanding these very adverse circumstances, the quality of the product, both butter and cheese, has been exceptionally good during the past year, and i he staff are to be congratulated upon the work which they have done.

“We have not followed the usual custom of writing off 5 per cent, on depreciation of property and 10 per cent, on plant,-, owing to the recent Government legislation, nor have .we, set aside a Reserve Fund. The Company has found it necessary to con-, form to the Finance Act of last session. and consequently have only written off 5 per cent, depreciation on machinery and 2% per cent, on property. We do * not consider this sound business, seeing that the lite' of most dairy machinery is 10 years, whereas at 5 per cent, it would take ' 20 years to write off, but i: is necessary owing to the Government’s action in declaring that any amount sei aside in excess of the amounts mentioned will be subject to a payment of inepme tax, which would affect your Company to the rate of 8s 9d in the £, and this would mean a .large drain on the payments to the suppliers. “It has been found, however, that it will be necessary to reduce the standard of shares for butter-making from 1001 b to 701 b per £1 share, as it is costing .the Company considerably more for running repairs, additions to factories and buildings, and new butter factories.

“The amalgamation of the Thames Valley Company with the New Zealand Co-op. Dairy Co, is practicallv an accomplished fact. The only remaining details are that there arc one to two small properties yet to transfer. As soon as this is done the amalgamation will be completed. Thames Valley Branch Office.—lt has been decided 'that the Thames Valley branch office shall remain at Paeroa for another yeai", and I think this will meet with the unanimous approval of the suppliers in this district.

“During the past year the Directors who held office for the previous season were requested by the N.Z. Co-op. Dairy Co. ,to act as an advisory board and watch the interests of the Thames Valley branch during the past Reason, and it was decided that on the election of three directors to represent the Thames Valley* ; Ward at the annual meeting of the N.Z. Co-op." Dairy Co., held on August 19, that the advisory should cease to represent the Company. "The .thanks of the •suppliers is duo to the Board for the manner, in whicn they watched the suppliers’ interests during the past year.

“Voting papers for the election of three directors to represent the Thames Valley Ward of the N.Z. Coop, Dairy Co. have been sent out to all suppliers, there being five candidates and three vacancies to be filled by the shareholders, the three 4 irec " tors elected being Messrs Walters, Hansen, and Buchanan. ( “As the Liquidators will have a final statement to place before the shareholders, they propose availing themselves again of the services of Messrs English and Luxford as auditors. ’■

. “In conclusion, we would like co impress upon shareholders that although the prospects for the coming season are bright, we.are of the opinion that prices during the next year or two will gradually recede ; hence it is of the utihost importance that dairy farmers should economise as far as possible. Produce as much as possible by using improved methods of farming, and rearing of better class stock, and if possible reduce their mortgages in order to meet lower prices and harder times.” LENGTH ? DISCUSSION. The secretary, Mr W. H. Blakeway, read the minutes of the previous annual and the annual repprt. Mr W. Claud Motion, chairman of the Board of Directors of the N.Z. Cooperative Dairy Co., Ltd., with which the Thames Valley Co., has amalgamated* was present; also Messrs F. W. Walters and F. Hansen, directors, and Messrs A. J. Sinclair, assistantmanager, and Mr Hames, secretary. Regarding the recent elections, Mr Buchanan said the voting basis would be reviewed before next election. The dried milk suppliers had an immense advantage. The Ngatea factory had been the means of cutting out the launching of cream across the Hauraki Gulf co Kopu, and in all ways had justified its erection. The sending of Mr Goodfellow to the United Kingdom was one of the most, important actions the company had taken. His a..

guarantee that the most would be done towards improving the marketing.

There was no room for pessimism, Mr Buchanan continued, but there would be a gradual decrease in prices for a few years. He would advise suppliers to pay off mortgages, improve pastures, raise the quality of the pr.oduct, and economise in their personal necessities. Mr Harris remarked that all the ne.w suppliers had not received a vote at this end—Thames Valley. Mr Hansen said the same thing happened at Waitoa. Mr Buchanan explained that it was ! one of the incidents of the transfer which would not occur in any other I year. He had proof of one case where several voting papers had been thrown under the counter at th.e post office, the suppliers evidently thinking they were merely ciculars. Mr Darlington suggested that no factory manager should be allowed to test the milk. Mr Buchanan said the concession had been given in the firs.t place at the request of the supplier. Complaints as to the manner of taking samples were made by various speakers, who considered that a. list of managerial duties should be posted up at the factory. Mr A. J. Sinclair replied that any suppliers’ committee could, have the list of duties posted t.o it on application. Every manager had his specific duties allotted. Mr G. Death said several Nethertori men started testing last year, getting 3*9 for nearly th,e whole of the season. A complaint was sent to Hamilton, and after that nearly every supplier’s test went up by. two or three points. (Laughter.) Mr Dixon said it was better to make complaints immediately, and not at the end of the season. M/ Death said that since the local manager had been testing at Nethertori'all the suppliers were satisfied. . Mr Harris endorsed Mr Death’s last remarks. ( Mr Buchanan said the cheese committees would have power to sell outright or consign for the coming season. Mr W. J. Byrne asked permission to speak. Mr Buchanan: Are you a supplier ? —No. Mr Buchanan: ' Then you cannot speak at this meeting. Mr Byrne : You do not want to hear .the truth. Mr Buchanan : We want the truth, but if we let any person who is not a shareholder speak at this meeting there*will be-n? end to the business of the meeting. The reduction of the share capital of the company from the £lOO to the £7O standard was explained by Mr Buchanan and Mr Sinclair. The Government now refused to allow the writing off of mpre than 5 per cent. depreciation on machinery, 3 per cent, on wooden buildings and 2 per cent, on concrete ; this had to be counteracted in another way. (Applause.) Mr Keyes brouglit up the matter of a veterinary surgeon, Mr Buchanan said the Government had been communicated with, and had replied that there were not enougn vets, to go round. He hoped the company would again move in the matter.

Mr Keyes said a man was wanted for the district,, including the Plains, and tp be situated at Paeroa, as central.

After the luncheon adjournment the motion in respect to a veterinary surgeon was passed, on .the ihotion of Mr Keyes, seconded by Mr McLean. Mr Motion said that if a m,an’s salary was fixed he had not the same incentive to get out late and early. A subsidy might be advisable for the first year, but he should Itand on his own fee; after that. (Applause.) Mr Vuglar thought any dairyman who had had 15 or 20 years’ expedience should have enough knowledge to look after his own cattle. Mr McLean remarked that each farmer seemed to have a different method of treatment for the-one complaint.

Answering Mr Death, the chairman (Mr Geo. Buchanan) said that in cases where cheese suppliers had gone .over to butter they would have to pay the debts on the factory.. Mr J. A. Reid asked what was going to happen on the Plains in regard to %d per lb for. coal shares. Mr Buchanan said he believed the coal would go to the Plains cheaper than it now did by steamer. When the Paeroa-Pokeno line was through the coal would certainly be cheaper delivered on the Plains. Mr Sinclair said the primary object of getting the coa'l mine was to build up a reserve of coal against goslow and strike. (Applause.) Mr T. P. Vuglar said that the Company could have advanced* another £60,000 to the suppliers, seeing that, there was £168,000 in hand. ' Mr Hames (secretary) replied that few people realised the amount of butter the company had to ho,id over for local consumption, the March, April, and May produce having -to be put into store for winter supply. Furthermore, certain sums, surpluses of cheese, for instance, had hot come hand ; there was a large sum due fur the Imperial purchase; there were large stocks of butter on hand at May 31. Possibly the company had been conservative, but advances had bee-i made to suppliers against bonuses in cases where the supplier had shown reasonable qause for asking for advances. It was very necessary -that suppliers should conserve their means at the present time. Some suppliers had been sheltering behind the mor<> torium, very inadvisedly. Mr Vuglar asked if the Company had not taken advantage of the financial condition to finance the dried milk business.

Mr Buchanan replied that debentures were issued to the Waitoa suppliers for the dried milk propositions. The Company had actually advanced more to suppliers than the banks Would advance the company on the product.

Mr W. C. Kennedy condemned the 10 per cent, basis for luilding .contracts. It would be I'eHer to pay .1 1 competent man £lOOO per annum >0 supervise.

Mr Buchanan, in the course of his reply remarked that the Wai-toa dried milk factory, the old cliei-se factory, the adjoining building l -’, etc., would cost something under £150,000. As to the 10 per cent, basis, no contractor would, during the war, contract on any other than a percentage basisThe building at IVaitoa would cost about £43,000 ; a contract had been let for the cottages. Mr Marshal.! han been able to purchase materials cheaper than the C.ompany could. The Ngatea butter factory, complete, cost between £9OM and £lO,OOO. It v r as the cheapest factory in the country, and was built on the 10 per cent, basis. He preferred, ordinarily, however, the old conti act system. Mr Darlington said he could have put the building up himself, but no one in the company was asked" if ne could build it. It could hate been put up by day labour. Mr Buchanan said the V/aharoa factory was being put up by day labour, under the supervision of the Company’s manager, and was going to cost about £17.000 or £lB,OOO, and .the plant about £12",000, making a total of about £30,000. The W.aharoa building was a 1500-ton factory and the Ngatea about 1000-tpn. Mr Sinclair said tenders were called for the Waharoa factory ; the lowest one received being £24,000. The Company therefore dec’.led to do the work itself, for £lB,OOl. robably. Mr Vuglar thought administration charges should he put in more detail in the balance-sheet. A Voice : We would reed a week to discuss it. (Laughter.) Mr Sinclair- A %d per lb butterfat covers administration. Compare that with what it costs some smaller companies! " Mr Buchanan, replying to a question about salaries, said Mr Gopdfel,liow could get a higher salary'from any other co-operative concern a quarter of the size. The directors had every confidence in the men Mr Goodfellow had put in the various staff positions, %’d per !b butter-fat was absolutely low for administration Mr Sinclair said Mr Goodfellow’s salary was £2OOO per annum. After the great fight Mr Goodfellow had put up last year the directors had offered him h further £5OO, but he had refused ie, There was no other man getting over £B5O per annum. The report and balance-sheeet were adopted. Referring to Mi' Sinclair said that during the Government purchase it did not pay to produce over 88 grade, but now that the open market was in vogue it would pay to produce, superfine, to be marketed under the “Anchor” brand. - Seventy-two per cent, was now being graded superfine. Thames Valley factories had been overloaded in the past, so that superfine was out of the question at certain periods. He urged dairymen to produce the highest qualit.v of cream ; it would pay them. CHAIRMAN OF DIRECTORS. Mr W. Claud Motion, chairman 01 directors, said he was always pleased to hear questions l , but quite a lot of questions asked that day shouH have been' asked at the creamery meetings.. However, the business belonged to suppliers, and they had a right to know, all about it. Regarding. Imperial purchase, the Company was anxious to get back !.o a free market. This would come about at the’end of this month, whei the two years’ agreement would cease.The Company had endeavoured, .through the New Zealand Government, to have the deal cancelled, but without avail. The Company thought it was acting patriotically by not pressing •the point, but they were painfully surprised to find that the people at Home had to pay 4s ip 5s ,p®r lb. The Company was unac e to consign for the open market,, as the Food Ministry would have comm.uideered the shipments on arrival in This was grossly unfa’.', as the butter was being sold for £s 2d, while Home producers were getting 3s 9d. At any rate, some Southern members at the conference in Wellington were not game to stand out for a better price. Mr Goodfellow, however, cabled to United Sta.ss of America and got an offe>’ of 2s fid, f.o.b. Auckland, for 1000 tons, and accepted *t, which justified the Company’s attitude. Then a further offer for 1000 tons was made, and accepted, and *ne money put up before the butter was shipped. As a result, the Imperial Government offered 2s 6d for the whole output up to January 31. The Company then fought for an order up to March 31. Eventually the Company got what it asked for. That Id per lb meant an additional £450,000 for its output. It also meant £1,250,000 more for the Dominion as a whole.

The New Zealand Government was asked to subsidise for the local consumption, up to 3d, per lb, totalling about £700,000. The Company had tried to meet the Government halfway, and ultimately got what was equal to 2%d, The Imperial Government had offered: some of the Imperial purchase butter for 2s per lb, and this was held out as a covert threat. The Company, however, arranged with all committees to wire protests against this export butter coming upon the market. These 150 wirbs had the desired effect. The suppliers, by the Company’s strong action, had secured a fixed price up to the end of August. ORGANISATION OF SALES. The Company had seen what had happened to meat and wool, and did not want the same thing to happen to dairy produce. It had, therefore, sent its best man, Mr W. Goodfellow, to England to look after the selling end. It was of no use producing if the produce was not well sold. (Applause.) The agtents at Home had become “stale and cobwebby” because they had been getting two per cem. all along from the Food Ministry, and had become slack in their methods and lacked enterprise, Mr Thomas complained that cream often had to stand bn the railway station, in the direct rays of the sun, for hours at a time,

Mi* Sinclair replied that the Railway Department had agreed to erect closed stands in many cases. Mr Sinclair quoted detailed figures to show that by its box factory the Company would save £27,000 next year oh cheese crates and butter boxes. The coalfield was a splendid investment. About 1200 acres were freehold. An area of 2000 had been leased for £450. There were 1000 acres of solid coal, ranging in depth from 11 tp 17 feet. An expert had estimated that, if the Company used 100,000 tons per annum, the supply would last for eighty ye.ars. Even if i< cost 54d per lb for production of the coal, or a total of £25,000, the company would still be profiting, and would be safe from labour troubles to a much larger extent .through having its own coalfield. One way and another, .the company hoped to produce more cheaply than any other company in the Dominion. HERD-TESTING. Mr Sinclair said arrangements were in hand tp have a, herd-testing department. The Company would test for 2s 9d per cow, provide the gear and the staff, and keep records. It was on herd-testing .that the future prosperity of the dairying industry largely depended. The testing would commence on September 1. A vote of thanks to the directors concluded the meeting.