SUGAR REFINERY.

New Zealand Times, Volume XXXI, Issue 4821, 4 September 1876, Page 3

SUGAR REFINERY.

TO THE EDITOR OP THE NEW ZEALAND TIMES. Sib, —I shall thank you to afford me space in your columns to enable me to draw the attention of merchants and other gentlemen interested to the advisability of erecting a sugar refinery in New Zealand. lam aware that the subject was brought before the notice of the public towards the latter end of 1873 ; but for various reasons the idea was not carried into effect. In bringing the subject again forward I trust that it will meet with earnest consideration, for it is one which especially affects the commercial interests of New Zealand.

1. So far back as July, 1873, when on a visit to the Eijis, I was struck with the advantages which the erection of a refinery in New Zealand would afford, especially in enabling us to extend and cement our trade with the islands. And whether such a work be undertaken now or in a few years time, the fact will constantly be before our eyes, that no better means of fostering our island trade exists than the erection of a sugar refinery. Since that date, and daring a late visit to England, Victoria, and Sew South Wales, I have been collecting information upon the subject, and I now propose to lay such information before you. 2. New Zealand annually consumes about 12,000 tons of sugar. Last year the amount upon which duty was paid was 28,130,i001b5. About two-thirds of this consumption is sugar in a refined state. A mill capable of refining 8000 tons of sugar annually would consequently be required. 3. At the present time we draw our supplies from Victoria and New South Wales. The refineries of Melbourne and Sydney supply New Zealand. Sydney supplies Auckland and the North ; Melbourne supplies Dunedin and the South, although, since the establishment of direct steam communication.between New South Wales and the central ports, Sydney is sharing in the southern trade. The question before us is, can a refinery here successfully compete with those in Australia? 4. But this is not the only question. There is another. Are we to allow Australian shipping to carry our cargoes of sugar, when we might do so ourselves ■ and with the utmost advantage to our coasting fleet? The carnage of twelve thousand tons of raw sugar to t"e refineries in Melbourne and Sydney, and then the carriage' across to our ports, means, very nearly, a gross freightage of 24,000 tons annually, for wh;ch we pay Australian shipping. Melbourne in 1874 drew a great portion of its supply of raw sugar from the Malay Islands; Sydney likewise. The vessels used are principally small craft, varying from 200 to 500 -tons. The sailing distance from those islands to New Zealand is very little greater than to Sydney or Melbourne. Our own vessels could well bring the raw sugar to New Zealand, and so not only find a profitable employment, but at once save the cost of carriage from Australia—a moat important item, seeing that an addition of £3los. per ton is placed upon Australian sugars, as the selling price in New Zealand markets (I quote Wellington prices). Deducting the small profits which merchants derive, a very good margin at once presents itself to a New Zealand refinery. Then as to the coasting trade, instead of Auckland, Wellington, and Dunedin being supplied by Australian steamers, the Union Steam Shipping Company, for instance, and the remainder of our coasting fleet would be the means of communication between the refinery and the various local markets. • 6, There are consequently three questions to be considered ; —-1. Can a refinery compete 1 2. Shall -we benefit our home shipping 1 3. Shall we foster our trade with the South Sea Islands ?

6. In answer to the first question, I have no hesitation in stating it as my firm opinion that a refinery in New Zealand can successfully compete with the Australian refineries, subject to two provisoes—1, place of working ; 2, Government concession.

7. And here I touch upon a difficulty which exists, and should not exist —a local jealousy which has to be combatted. Auckland, Wellington, Lyttelton, and Dunedin would each like to have the refinery erected in its own port; but the question is not which port would be the best, but where would a refinery pay the best. lam an Auckland man, and naturally would like to see the refinery in Auckland, but I know this, that if a refinery were erected there Auckland could not supply Dunedin, for that port would be able to import just as cheaply from Melbourne as from Auckland ; and on the same principle Dunedin could not expect to supply Auckland. I have consequently carefully looked into the question, and I feel certain that Wellington or Nelson offers the greater number of advantages to a refinery. The reason which induces the Union Steam Shipping Company to call for tenders for the supply of its steamers in Wellington, guides me in thinking that Wellington would be the best port at which the refinery should be erected. I believe that when this subject was first mooted two companies were sought to be established, one in Wellington and the other in Dunedin. Although I deeply respect the enterprise of the Dunedin merchants, yet in face of the Australian competition, I do not hesitate to say that if the companies had gone on, and the two refineries had been erected, the one at Dunedin would have succumbed. I do not suppose' that Dunedin wishes to throw away its money, and X consequently say that if New Zealand is to have a refinery capable of competing with Australia, it must be erected in a central position. Not until New Zealand is capable of supporting two refineries will a refinery in Dunedin ever pay. It will be many years before New Zealand can hope to bo in such a position. Dunedin might well be content with seeing its steam and Bailing fleet prosper ; Auckland with witnessing and participating in the additional island trade. If, however, eitherof these two cities will sacrifice general interests to attempted local advancement, then the capital required for amill —£100,000 to £150,000 —will have to be locally supplied. In the present state of the colony, I fancy, that there will be some difficulty in raising such a sum in any one centre. My opinion is that wo should all work together, erect a refinery where it will pay best, and participate in the attendant advantages. lam quite prepared to show that a refinery in Wellington could undersell Auckland or Dunedin 10s. to 20s. per ton' throughout the colony.

"- 8. With respect to the second proviso, Government concession, the following few figures explain themselves In Melbourne the duty, is 3s. per owt. upon sugar generally; in Sydney ss. per cwt. on raw, and 6s. Bd. upon, refined sugar'; in Queensland the- same iduty prevails as in Sydney, while in New Zealand I the tariff is 9s. 4d. per cwt. on both raw and 'refined. Thislatter Is an extremely high impost, but the necessities of the colony apparently demand it. I fancy, however, that' the Government would not be indisposed, in the course of this or the next session, to. take the matter into consideration. A differentialcluty might be arranged, like that which prevails in New South Wales ’ and Queensland. The advantage to the trade of the colony at large demands some such concession.’ The amount of duty collected upon sugar last year was £117,210. A slight concession would not materially affect the revenue. Parliament would, however, have to be consulted, and it may be as well that our representatives generally should look into the matter. It is a question whether this one article—sugar -is not too heavily taxed. 9. Having now touched upon the most important points connected with the establishment of a refinery, and it will doubtless be readily admitted that we all desire to see our home shipping prosper and our island trade increase, I turn to the refinery itself, and ask whether is likely to succeed—l feel certain that it will. Sugar refineries do pay, and pay well provided they are carried on upon a sufficiently large scale. Now New Zealand actually requires, at the lowest calculation, a mill capable of turning out 150 tons of sugar per week, and any one acquainted with the workings of English refineries will readily admit that such a mill ought to pay well. There are many smaller mills in Glasgow which pay handsomely. The question of difference in the price of labor between Victoria, New South Wales, and New Zealand is not a very important one. A sugar refinery requires much skilled labor, and that class of labor is almost equal throughout the Australian colonies. Labor generally is at present a little better paid in New Zealand than in the sister colonies, hut it is a question whether the difference will long continue. If expenses are a little heavier in New Zealand, the absolute saving in freight and transhipment will more than compensate that disadvantage. I consider that a saving of 355. per ton can be effected on freight and transhipment. A sugar mill is expected to pay 20 to 25 per cent, because the risks attending the venture are very great. To pay at all a mill should pay 20 per cent. Looked at in another light—that is the general turn over of a year’s transactions—l consider that a - calculation might be made of 8000 tons of sugar at £3O per ton, equal to £240,000, which in a manufacturing view ought to allow in the colonies 10 per cent, profit. I make a low calculation of the turn over, because I do not wish to drive importers out of the field. It would be a mistake to do so. A refinery, however, could well expect to pass 30,000 tons of sugar through its hands in the course of the year. Finally, I trust local jealousy will not interfere with the establishment of a mill. Let the subject be fully discussed. It will take a year or two to carry the project into effect. I ask those gentlemen interested in the matter in Auckland to give me the credit for this; that if I thought that there was a probability of success in proposing the establishment of a refinery in the North,, I should most certainly propose it, but I cannot help seeing that a central position will pay the best. Dunedin will act for itself; but I ask merchants there to remember that Dunedin cannot monopolise all the trade of New Zealand, and that as regards this special matter of a sugar refinery, it is better to see one erected in some place in the colony than to be totally without one. The extra work for our shipping and the encouragement of onr island trade must benefit us all alike, —I am, &c., Coleman Phillips. Wellington, September 1.