Financial Reviews CONTROL NOT RIGID ENOUGH

NZ Truth, Issue 1178, 28 June 1928, Page 16

Financial Reviews CONTROL NOT RIGID ENOUGH

I. . . ♦ L — ■ Southern Cross Glass Coy., Ltd., Second Share Issue NEW ZEALAND MARKET FOR PRODUCT (By "Fiat Lux.") It is inevitable that young countries should pass through various commercial evolutionary periods, starting with primary production and entering gradually into the manufacture of products of a secondary nature. MANY factors govern the rate of Proof of the existence of a splendid progress towards secondary indua- market for. glass and glassware In the tries, but the principal element is Dominion is supplied by the "N.Z. Year usually the growth of population. Book," which gives the values of imFor many years past this country, portations of these goods m figures small as it is from the viewpoint of which represent the domestic value m population, has had certain essential the country of origin, plus ten pei secondary industries, such as boot fac- cent. Tories, paper mills and the like, but the By the time these goods reach th< time has now arrived when the popu- consumer,, however, the values will lation is large enough to warrant the have increased by approximately fiftj establishment of many other secondary per cent. 'ndustrles with every prospect of sue- In considering the following figures cess — given adequate capital, suitable due allowance must be made for thiv tariff protection and sound manage- increase, which covers freight, insurme,nt. ance, ipacklng, breakages (heavy), imThe latest - secondary industrial porters' and distributors' costs oproposition to be offered for the handling and profits, support of the investing public is -.„, 1fl2 « Ift9 , 10 «. -„„- the Southern Cross Glass Company U * 2 19 J 3 19 J 4 19 J 5 of New Zealand, Limited, with Xn _ * Q „ ._ * _ « fifi ft , fl 077%0 77 %4 X , 0 9 ari headquarters and works at Ash- 507,269 247,927 388,638 377,245 392,463 burton. A further point which the directors "Fiat Lux" likes the scheme, but make is the potential market for suitdoes not like the way it has been able glass-containers for foodstuffs, handled to date. Owing to the high cost of importing The company was registered m such containers, " Dominion manufacMarch, 1926, with a nominal capital of turers have been practically debarred £250,000, divided into £1 shares, of from using glass containers, but with which £15,000 were issued as fully the advent of local production at suit-paid-up to the founder of the scheme; able prices a very substantial trade £150,000 were to be reserved, leaving should be possible m this direction, 55.000 shares for the first issue and particularly m view of the ever-in--75,000 shares for the second (or pre- creasing cost of tin plate, sent) issue. Australia has done extraordinarily The main object of the company is well for investors m the glass industhe manufacture of glass and glass- try, its principal works being amalga,ware. mated m 1922 under the title of the The industry has been made possible Australian Glass Manufacturers Comby the opening-up at Mount Somers, pany, Ltd., which has paid regular Canterbury, of a splendid deposit of dividends of 10 per cent, per annum almost pure silica, which is the most on ordinaries, and, m addition, has— important raw material required. during the period — built up disclosed The deposit is situated on Crown reserves of over £265,000. lands about seven mllea from the It is understood that Its success has Mount James rail- ' been due prinqiway station, with pally to bottlo which it is connect- r r t f 1 T\ • * manufacture, sheet ed by an iron-rail- VfflffflhlP I JPt\nslT<i E lasß and hollow ed tram-line. V UIUUUIC J^KfJUOIIO ware being an adThe Minister of ■ ■ verse factor, due Mines has granted it Is said, to the company a 22 years' lease of an lack of suitable tariff protection area of 100 acres, renewable for a Of course, the trade conditions apfurther term of 44 "years at a royalty plying to the glass industry m the of 9d. per ton. Dominion cannot be ' compared Witt's In addition, negotiations have been Australia, where the population is so concluded for the coal-mining rights much greater, enabling huge turnovers over the same area, and this 'covers at the various works m the different also the rights to valuable fire clay States on low overheads, deposits. But, against this, their shareholders' Jt is estimated that the raw ma- funds amount to nearly one and a-half terial can be landed at the factory m millions sterling, of which £1,105,000 Ashburton at a cost of under one represents paid-up capital upon whicV. pound per ton. dividends have to be earned, whilst In ventures of this nature, where ex- the paid-up capital of the New pensive plant has to be installed to Zealand concern is unlikely to exceed process the material, it is essential to £120,000. success that sufficient raw material be . After making due allowances for difavailable to keep the plant going for ferences m population, plus the differmany years. ence m capitalization, "Flat Lux" is of i j.!. rtu c „;k... r,.--- opinion that the Dominion company In the case of the Southern Cross s £ ould do lly aa we ll, comparaGlass Company, Ltd.,. sufficient tlvel ag the Atlßtealian eomr>any . testing has been carried out to iven adequate capital and efficlen t prove the existence of abundant manageme nt. supplies of silica for many decades. The' company Issued a balance-sheet The geological report on the area, as on November 25, 1927, which showed made by Professor R. Speight, M.Sc, that from incorporation m March, 1926. F.G.S., F.Am.G.S., of Canterbury down to that date, receipts were as Museum, bears this out. under: The directors very wisely decided to _„_.__„ employ the highest talent available on nc^cirio the technical side of the venture and c as h from shareholders . . 22,402 to this end retained the services of H. De PoS it a .. •• .. 137 Schnurpfeil, of Carlsbad, Czecho- c * ditora , owlnE .\ ' KK7 Slovakia, to ' supply and ihstai the (owing) .. r .. 557 necessary furnaces and plant. Bank- advances .. „ ■„ 2,217 He Is now supervizing the com- ■ ■ > "777777 pletlon of this work at Ashburton and ±.<Jb,<ji3 has expressed the following opinion of PAYMENTS this company's prospects: . «„„,»,_„„ oo™ "The silica sand is very suitable for Buildings .. 9,873 making window, plate, white bottle, g"*™? machinery .. .. 4,222 flint and fine hollow glassware of offl°e furniture 9 eV^e ae bunain?' and plant will be S1^ a Sg 6^ iitaaoii im eminently suitable foj ■ *e jnanufacture c^£teS£y returnable '. V. ■ ll JJ? -penses .. ■■ 7,904 "The enterprise, under efficient man- £25 313 agement, should be an Undoubted sue- '° cess." . Full details of the preliminary exRegarding the working 1 personnel, it penses are supplied and include £4,454 is intended to import the initial staff for commission and travelling exfrom England and. Europe. penses. .. In choosing these officers, the ser- Trulyj a company flotation is a vices of the con- -" • ' ' -• mighty expensive structional engi- • business— and this neer will be avail- •* ,■ , I A v f critic opines that able to the direc- {jrtSttlCLl KsCLfittCLl l he directors will tors. Vl . l s llH ** *"*/'".*^** , have to do things a Later on, when : •''■■'•■■ whole' lot better m the works are under . future If the comway, it will be possible to train a New i pany is to be the financial success its Zealand staff to eventually take over potentialities warrant. . . all except one or two positions m the ' |g extraordfnary fea . Whilst agreeing upon the present * U h 7 rh a^^ necessity for bringing m .outside which calls for the most causticskilled labor, the sooner New Zealand- comment...., ers can be trained m the work the bet- That man item which appears In the ter f or New Zealand. . capital entries, and is headed: "ApWith the original' capital which was plication money, outstanding, £2851 raised, and which will be discussed m 7s. 3d." ' ' ■ • ■ ■ detail later, the company has erected As the amount payable on applicacomniodious and up-to-date, factory tion for these shares was 5/- per share, buildings, upon six acres of Crown re- it means that the directors allotted - serve, situated about a mile north of 11,405 shares without receiving the apthe Ashburton town boundary. plication money. The freehold title to this area This is an entirely new departure is being obtained at. a total cost of m company administration and a very approximately £150. dangerous one, particularly when the Further extensions to the buildings question of forfeiture comes up, since are now being planned, presumably to forfeiture should be exercised only m provide accommodation for the manu- favor of the company, facture of additional lines immediately ttnauestionablv the financial control the factory goes into production. Unquestionably, tne^nnanciai control. As it is intended, first of all, to pro- of this concern requires considerable duce ordinary window glass, the erec- tightening-up. ■■ ■ tiori of furnaces and plant for this Notwithstanding the obvious errors purpose i^ now proceeding. v w hich have been perpetrated to date In This will be followed immediately by ... . . ■ . . , m , . T „ - . the installation of machinery and W- thle undertaking, "Flat Lux" feels sure naces for the production of both bot- that the directors will profit by these ties and hollow ware. experiences and ultimately bring to The directors anticipate that the profitable success another healthy Ct %^g!&fisHsSl. I sl rT 3^ TT:, T*<7™ add present year. further prestige to the Dominion. If the product Is up to the imported standard — and there is no reason why it should not be even better and cheaper — then the juecass of the company should be assured, since it is shown that there is a sound market right here 1-n fhet Tlnmlnlnn.