UNITED DAIRYMEN.

Pukekohe & Waiuku Times, Volume 9, Issue 568, 21 September 1920, Page 2

UNITED DAIRYMEN.

CONFIDENCE IN DIRECTORS. FUTURE PROSPECTS FRIGHT. HARMONIOUS ANNUAL MEETING [Published by Arraogtmeti.]

A very intelligent interest was disptoyed in the company's the 250 shareholders who attended, the annual meeting of the New Zealand Co-operative Dairy Association at the King's Theatre, Hamilton, on Thursday afternoon, .1 .i* attendance was a lecord one, and the meeting, which was Presided over by Mr. Claude Motion (chairman of directors), was of a most cordial nature, the shareholders expressing their satisfaction with the state of the company's affairs, and their appreciation of the work of the directors, by according them a vote of appreciation and complete confidence.

The report and Halance-sheet, which were taken as read, were adopted. Mr. C. Motion, chairman of directors, in formally moving the adoption of the report and balance-sheet, said: "I desire to hear tily congratulate the shareholders of the New Zealand Co-operative Dairy Company on the successes of the past year's operations. The turnover for the past year has exceeded two millions sterling, which figure is considerably in excess of that of any other dairying concern in the Southern Hemisphere. In reviewing the year's operations, I desire to say that a very considerable portion of our directors' time has been occupied in matters connected with the completion of the recent amalgamation of the New Zealand Dairy Association, the Waikato Dairy Company, and the Waikato Cheese Company. A great many adjustments and a good deal of reorganising work has been necessary, which has entailed considerable work ond much thought. The three outstanding features of the past year's work are, i.e., firstly, the completion of the amalgamation; secondly, the signing of Nathan's agreement; and, thirdly, the negotiations commenced re amalgamating with the Thames Valley Co-operative Dairy Company. Early in the year it was decided to remove the head office from Auckland to Hamilton, which is now recognised to be the centre of the dairying industry of the Auckland Province. The Wellesley Street, property was therefore disposed of for the sum of £3500, and your directors let a contract for the erection of the new office buildings on the favourable site previously owned by the Waikato Dairy Company, at the corner of Ward and Victoria Streets, Hamilton. The completed building was to be a two-storey structure, and to cost approximately £17,000, but in view of the amalgamation with the Thames Valley Dairying Company, a further storey is to be added. The ground floor will be let for shops, and, it is anticipated, will retuVn a sufficient rental to enable our office to sit practically rent free. Shortly after the removal of our head office staff from Auckland to Hamilton, the temporary premises then occupied were completely destroyed by fire, and, as a result, our business was very seriously disorganised. Valuable records were destroyed, the replacement of which called for a great deal of additional work on the part of our staff and resulted in numerous mistakes, which undoubtedly were very annoying to the company's clients. However, you will be pleased to know that the office has been completely reorganised, and the staff are now occupying the premises lately vacated by the Farmers' Co-operative Auctioneering Company. 1 desire to pay t tribute to the trustees, who were in charge of this business during "ihe early part of the year, and to whose foresight and judgment to a large extent is due the successful completion of the recent amalgamation.

Coal-beariiiy Area Purchased.

On April t; the election of directors took place, the election being conducted under the ward system. On May 31 our late secretary, Mr. H. W. Dent, resigned, and I desire to place on record the appreciation of our directors of the long and valuable services rendered to the dairy industry of the Waikato by Mr. Dent. Among other important matters dealt with during the year was that of providing adequate coal supplies for your factories for the future. Twelve hundred acres of freehold coal-bear-rng property have been purchased at Pukemiro, and mining rights have been secured over an adjoining 2000 acres. Mr. N. I). Cochrane, coalmining engineer, has been engaged to take charge of the development work, and is now busily engaged in preparing a complete survey of the field. It has been proved that the property contains sufficient coal to cover the requirements of the company's factories and suppliers for many years to come. The present price of steam coal is 27s per ton, free on train. If the company was mining coal to-day the cost would be 12s. I believe shareholders will appreciate the foresight and judgment of your directors in their endeavour to provide the dairy industry with adequate supplies of coal for the future.

) The question of reducing the price ; of butter-boxes and cheese-crates has • also received consideration. We find that butter-boxes will cost the company 2s Bd, and cheese crates 3s lOd each for the coming season. Other ' factories in other parts of New Zea* land are securing their supplies at :r much lower figure, Taranaki paying 2s 4d for butter-boxes and 3s for cheese-crates. Your directors realise that something will kave to be done t to reduce the cost of out containers, and at the present time, I may say that we .ire investigating several propositions. Unfortunately the quantity of white pine available is extremely limited, the bulk of this timber now being owned or indirectly controlled by Australian companies. It has been estimated by experts that the available white pine in New Zealand will lie completely exhausted in from ten to fifteen years. Quality of Butter Improved. The quality of our products, butter especially, nas given your directors corsiderable cause for anxiety, and in consequence, at the commencement of the past season, cream-graders and Government inspectors were appointed for the purpose of standardising the grade of the cream. In most I cises the result has been remarkable,' I and 1 am pleased to report that there has be#n a considerable improvement in the quality of the company's butter. I'here is still riioin for iiHprovemeii. However, in connexion with the supplies of milk to cheese and casein factories, Your directon,. have realised lor some tune past that a laboratory Should be established at Frankton Juliet ion. Steps have therefore been taken to secure a dairying chemist and bacteriologist, and, although noappointment has yet been made, the matter is now under consideration. ' During the year our Auckland Of- < fice has handled goods to a value ex- 1

ceed*ng £IOO,OOO. A profit has been | made and a cash rebate of 2 1 * per j. cent, will be paid on all floods purchased during the past season. Your \ directors have decided to limit the trading to the Ijandling of a -few heavy lines which will be imported in large quantities and sold as much as possible ex ship. It is not the intention of the company to enter extensively into competition with existing co-operative trailing concerns. The primary object of this organisation, is to manufacture and market dairy prod in \ and it highly desirable that we should continually keep this objective steadily in view, and not allow our trading department to absorb unduly out time and attention. Mr. E. Rewcastle, the present Auckland manage;-, is to be transferred to Hamilton, and will take up the important position of private auditor to the company. His work, of course, will be quite independent of that of the auditors appointed by the shareholders.

In dealing with the question of prices and markets, I have much pleasure in stating that when the tinal payments have been made, the average price paid for superfine butterfat delivered to central factories for the past year will be Is 9 l-f>d, and this amount will be available after ample provision has been made for depreciation and after writing off the whole of the amalgamation expenses and providing a substantial contribution toward the cost of the development of the company's coal-mine at Pukemiro.

During the past two years the whole of the butter available for export from New Zealand has been sold to the Imperial Government at Is 7'id f.o.b. This contract expired on July .'ll last. Steps were taken manymonths ago, with the object of securing a free local and export market at the termination of this contract, and although every effort has been made in this direction, I regret to say that we have not yet been successful. The Imperial Government appears to be determined to continue the existing system of purchasing butter, although they have intimated that they will not purchase cheese. The position is, therefore, that cheese is to have a free market, while butter is to be sold at considerably less than its actual value. Negotiations are in progress for the disposal of the coming season's surplus butter at 2s 6d net f.o.b. It is also anticipated that the Government will be unable to contine contributions from the Consolidated Fund to reduce the price of butter in New Zealand, and in consequence the local price on October 1 will be fixed approximately at 2s lOd per lb, which will mean 2s per lb. to grocers and 2s 6d net to the factories, which price will be equivalent to the net f.o.b. value. I have no hesitation in saying, gentlemen, that it is almost entirely due to the amalgamation of the dairy .industries of the South Auckland Province that we have succeeded in raising the British Government's offer from 240s to 280s, a difference of 4d per lb, which figure represents an increase to be* paid out to the suppliers of the South Auckland Province of at least £400,000. I think you will agree with me that the advocates of amalgamation have already justified their claims regarding the advantages to ,be obtained by combined marketing. The people of the cities are organised into strong Labour unions, and if we are to obtain for the farmer a payable price for his products, in future, it is absolutely imperative that the existing combination of dairy industries should be maintained, and, if possible, strengthened.

Prices of Dairy Farms.

Dealing with future prospects, 1 have no hesitation in saying that the outlook for the dairy farmer for the next year or tw<# is exceedingly bright. I think it my duty, however, to sound a note of warning regarding the high land values ruling in the South Auckland Province. If the prices for dairy produce hold, the probability is that the majority of those who have recently put chased at extremely high prices' will be all right, but if there should bu iu decline in prices, I am satisfied that many will lose their farms and much hardship will lie the result. We have a wonderful country, and the finest dairying climate in the world, but notwithstanding these great natural advantages, it is highly desirable that t)ie price of our farm land should not be forced up to an excessive figure, otherwise out producers will have to work exceedingly hard to make both ends meet. The advanced prices for the coming season have fixed by the South Auckland Dairy Association for the month of August, butter Is 'id, cheese Is 9d, dried "milk 2s, but just as soon as the disposal of butter has been settled will the price of butter and cheese be raised to 2s per lb. The total for the season, if nothing unforeseen occurs, will probably be 2s 7'.d for butter, 2s 8(1 and 2s lOd for cheese, and 3d for casein.

Work of the Staff. In concluding my remarks and be fore calling on another speaker 1 desire to pay tribute to the very successful work done by our staff during the past J2 months. The factories are. al! in good shape, and are doing excellent work undei the superintendence of Mr. Kirkman. The office staff have had an exceedingly heavy year's work, due to the amalgamation ifid to the fire, and I think you will agroe with nit* that their work has been very creditable akst>.

r I now desire to formally move the 1 adoption of the report and balancesheet, and after this has been seconded. before a discussion takes ? place. I would like to call on our ? managing director to deal with the . balance-sheet and other matters of interest. (Applause.) I Mr. W» Goodfellow, who was greet- . E d with applause, said the directors had experienced a fairly strenuous p.year. Referring to the' output he . said this continued to be satisfact j ; ory. The turnover this year exeeeded £2,#00,000, and next year it would be doubled. A number of suppliers had asked why the company should worry itself about further' amalgamations. Their object was to con solidate the dairying industry in the Auckland Province. Australia had sold her butter to the Imperial Government at LMOs, and there were many people who thought, when this de;il was put through, that the New Zealand produce was in the pocket of the Food Controller of Great l.ritain also, al a similar price. Fortunately I heir company was strong enough to maintain a lirm attitude, and they had now been promised 280s twr their butter, though the conditions requested by the New Zealand butter producers tor a free market after March >1 next had not yet been granted. There was a strong body in England, known as the Consumers' Council, urging the Imperial Government to permanently control over seas butter. If this principle were established it might prove to be dis astrous to New Zealand producers, and such control would undoubtedly ] spread to cheese, meat and other products. Until the 'natter was iettled with the Imperial Government the payments would be kept down, nut immediately the negotiations were ! completed the payments would be raised to 2s. * Butter for City Market. f As a result of the amalgamation with the Thames Valley Company one of the two Auckland depots would I closed, and it WW intended toi

erect a factory in the .vicinity of Auckland to convert the cream from the surrounding country into natter and to put this butter straight on to the Auckland market. It was regrettable that the company WM not,to have a free market this year, ui they had intended to do a good deal of pioneering work in England. They did not agree with the C.W.S. scbelm, neither did they altogether &WUr selling through Tooley Street. nssoon as they got a free market they would appoint a good man to takk

charge of. their London office. was no doubt great developments would take place in the mil!: industry during the next few years, at|i it was possible that the company might undertake the manufacture of other milk products.

Mr. Goodfellow dealt with the financial position of the company, quoting figures in detail in support of hi* statement, which information was received by the shareholders with satisfaction.

In reply to a question, Mr. Goodfellow stated that the New Zealand Dairy Association took over aH Messrs. Nathan and Company's liabilities and commitments in connexion with the old Matanga Cheese Company, which agreement was automatical iy transferred when the amalgamation took place.

The Milk-powder Business. In answer to a further question regarding Miikfoods Limited, Mr. Goodfellow said the ZerJandia Milkfoods Limited was a subsidiary company, organised and financed by various groups of suppliers, the idea being to allow the suppliers interested to obtain all the benefits and accept all liability. The agreement between Miikfoods and the N.Z.C.D.C. the latter company the right at any time to take over the Miikfoods' business at book values, ,and to issue shares in the N.Z.C.RC. to Miikfoods' shareholders, to be paid up to the same value as the shares then held. Mr. Sinclair had been acting as Milkfoods' secretary for the past few months, but now the work was increasing. Mr. lis ay, the present secretary of the Thames Valley Dairy Company, had recently bfeen appointed secretary to Miikfoods' Limited, and the Waitoa group, thereby embracing all the milk powder factories in which the company would be interested. He stated further that all expenses in connexion with the milk powder business had been charged to the various factories concerned. Another shareholder complimented the company on the efficiency, accuracy and integrity of its staffs. M? though, he said, he had been adH

ciated with the company for nJpi years, he had never single mistake in any of the sent him. (Applause). Another supplier suggested that' «•; the reduction for shares should be made in the middte, instead of at the end, of the season. •.V Mr. Goodfellow explained that this was impracticable as it was impossible in the middle of the season to know how much butter-fat had been supplied by eich supplier. Mr. Ewing expressed his keen appreciation of t% work of the direcyr ors, and esptjpftlly of tfefi success with which t|tfhr had bright.about . the amalgamation. seemed to think that Bwine)' : was oj>posed to amalgamation, biff/a he desired it to be clearly known he was not. The s|>eaker dwelt ui>o» the advantages of amalgamation. He hoped to see beforc'lOng' the whole of the dairy companies throughout the Auckland Province amalgamated. (Applause.) Mr. (Joodfellow paid a tribute fa the jx'Tsisteoce, frankness, and Stiut- - ly manner of Mr. T. C. Hlacjtett, chairman of the provisional directors, to whom was due; TO' a very large measure the consummation .qf the amalgamation. He suggestey*that the sum of £IOO •be paid to ot, the trustees, with t'2so for the chair-' 1 jman (Mr. Blitckett), for valuable Services rendered.

The suggestion was moved as a resolution by Mr. Kwing and seconded by Mr. Sainsbury, who both regarded the amount as inadequate. The motion was carried unanimous-

'yMr. Goodfellow suggested that tiw honorarium of the directors be find at £l5O |K?r annum, with £6O0 f fvtta chairman. The speaker com)d*rad the chairman of directors shotdd put in !•. considerable amount of his it the company's headquarters, to deal with im|>ortant matters and meet suppliers. They could -not expect him to uo this without paying him adequately for his time and services.

Mr. Robertson moved on the lines suggested by Mr. Goodfellow, with the addition that out-of-pocket expenses be also paid. This motion was also carried unanimously. Messrs. English, Chambers, Hewit? son, and Luxford were unanimously reappointed auditors. A motion was carried fixing the time of future annual meetings at 12.30 p.m. ( Mr. Lee Martin said the discussions that day had been of a very fine character and proved that they had men of ability in every part of the field over which the N.Z.D.C. operated. Very little had been said of the company's new journal, the Dairy Farmer, which, he believed, would supply a longfelt want, and would more than ever assist in binding the suppliers together. He had much pleasure in moving a hearty vote of thanks to the directors for the way in which they had conducted the company's business. A Voice: And complete confidence in them.

With the latter addition the motion was carried unanimously. The chairman said it gave the directorate the greitest pleasure to see the harmony which had prevailed at that record meeting. It was an excellent sign when they had the shareholders of "".he erstwhile rival companies sitting together as members of the one company, in the greatest eoncord. It augured well for the future, and he trusted that the next annual meeting would be equally pleasant and harmonious.