N.Z. TOBACCO INDUSTRY.

Shannon News, 12 March 1926, Page 4

N.Z. TOBACCO INDUSTRY.

—. + FLOUEIISHING CONCEEN. BIG EETUENS TO GEOWEES. in advance £251, as against £333; cash., "Cambist," the well-known eommer-j cial critic, writing in the N.Z. Pictorial I News, in regard to the tobacco indus-| -try, says:— j "Nothing succeeds like success; "i that short proverb might be' used to sum up the short history of the above J remarkable company. This national in- J stitution, for the company is more than J a mere dividend-earning concern, has established the tobacco industry in the Dominion. Before it came into exist-1 ence many and various efforts • were made in the cultivation of tobacco, and just so many attempts were directed to the, preparation of the manufactured article. It is needless to say that the outcome of these well-intentioned attempts only resulted in disappointment to all concerned, and, at one time, it looked as if this country would never develop into a tobacco producer. From the time when Mr. Gerhard Hu&hecr came upon the scene and i?ok up what : appeared to be a hopeless task, namely, the proper methods of tobacco cultivation and the manufacturing of the cured leaf grown in this country, extraordinary progress has been made. Today, -owing to the great experience of that gentleman, his undoubted expoit knowledge of every branch of th:.<; business, his splendid business qualities and sterling honesty, we have a fresh and valuable productive asset added io the Dominion's economic outfit. The National Tobacco Co., Ltd., depends upoi locally grown tobacco, and, to get the needed suppli'es for its manufacturing purposes it has had to instruct and guide those farmers who undertook the cultivation of this beneficial "weed." In every case where marketable tobacco has been produced in this country, this j has been achieved under the expert instruction of the gentleman who is now j th'e chairman of directors and manager I

The Profits Obtainable from Tobacco ; Growing. i are vastly -greater than any thiiiy

of this successful company. < hitherto known by the man on the land. The labour required in the cultivation of this plant is of the lightest description and extremely pleasant in its application. A few acres, properly planted and tended, will return far more income than a larger area devoted to dairying, wool, meat, or other crops. AJbpve all of this, has to be noted the Jac't that tobacco is always in short •supply, and, consequently, there is 'usually only one chance of fluctuation _n the market price of curod leaf, namely, a rise of a penny or two per pound, which is, of course, a splendid situation for the anxious .grower. This country with worry over the price of .wool, meat, butter, cheese,- but, in the <;asc of tobacco, there is nothing but pleasurable expectation on the part of the growers, and, in so far as actual re-

liults have been arrived at, the cheque for the goods has been of an opulent character. There is not space here for all that could be written about tobaicco- . growing in New Zealand, but the company reports that, for the past season, •' the cash returns to the grower have averaged again £SO per acre, and in iiome cases as much as £9O per acre.'' It is this side to -which makes the industry so important .:o the Dominion, for it replenishes the worthy purses of the gardeners who work so willingly in the cultivated patches devoted to the growth of this valuable plant. The time is not'-far disfant when we shall See Enormous Acreages Laid Out in tobacco, and all of this will be properly laid to the initial acts of the promoter of the National Tobacco Co., Ltd.

The company has paid to its proprietors, ever since it commenced business, S v per cent, on its preference capita], .;.nd 12 p'er cent, to the ordinary shareholders. Both of these distributions re of a highly satisfactory nature. At late of the second balance-sheet, .the )aid-up capital is given as £23,773 as ,'omparcd with £14,737 in the first bal-ance-sheet. In the first balance-sheet 1 he company was burdened with 7* per ■rent, purchase debentures amounting to, 2100; these have all been, redeemed '

and therefore do not appear as a liabil , ity in. the second, document. The Total of. Assets . in the first balance-sheet came to £19,606, and in the second balance-sheet they have grown to £36,060, thus showing the remarkable increase of £17,000 during a period of twelve months. With such solid ass'ets, the amount of trade liabilities (£991) appears as like a speck of dust upon a universe of cash. "Cambist" is unable to call, to mind anything of equal merit in the whole history of New Zealand incorporated business enterprise. It is really a splendid performance and, therefore praiseworthy from every point of. view. Turning to the assets side of the balance-sheet, we get the following instructive movements, 'all of which are commendable, namely, property account £6193, increased to £8791; the depreciations written off total £1790; stocks of raw leaf and manufactured tobacco have grown from £5371 to £12,368; advances account £663 has disappeared, and in its place the following new accounts are in the 1925 balance-sheet — advance on mortgage £1000; advances on purchases £2095; sundrv debtors (1024) £3578, now £5421; charges paid in bank £3546, and in 1925 £5356. It will be noticed that the business has made

Remarkable Progress during the past twelv'e months and that all of the increases under the various headings have more than covered the advance of increased paid in capital. Stocks this year are £7OOO more than in the previous balance-sheet, but the business has grown in a remarkable manner, consequent upon the splendid quality of the manufactured tobacco, and, what is better still, that high standard of quality is perceptibly improving at a rapid rate. The smoking public of the Dominion have found this to be the case; the orders for this tobacco are growing month by month, so that the sales department is establishing fresh records in every period of the year,' but, to be quite correct, it is the sensible smoking public who are 1 really putting up these records —they | demand the various brands of the Na» tional Tobacco Co., Ltd., because nothing else meets their requirements in price, quality and grateful satisfaction to the same extent. Then, again, the book debts are £I9OO more at this balance. Considering th'e fact that these are contracted with wealthy merchandising firms, this rapidly growing business is benefiting by the intermediary services of firms which pay 'promptly and secure full discounts. Taking that view of the situation, "Cambist" would not be surprised to find that The Turnover is over £60,000 per annum. While the latter supposition appears to be reasonable and in keeping with the prosperous- ' initiation of this young company, there , can be no doubt that th'erc is ample room for much greater progress in the future. It is the desire of this candid writer to focus the attention of all patriotic smokers on the brands of this company; he wishes on this occasion to inform them that every pipeful of these splendid tobaccos' smoked in peaceful contemplation helps to make a local market for every leaf of tobacco grown in this country. The man on the' land who is producing this valuable raw product deserves most worthily that kind of practical support. This view of the- situation is neither selfish nor narrow; it is as sensible and as compelling as the call of duty anfl< rectitude imposes upon every worthy citize:a l in the Dominion. The man or woman who supports the New Zealand tobacco industry helps to build up new wealth, and the benefits of such a course reacts for the good of all. Let us never forget that foreign tobaccos are mostly produced by niggers or ch'eap slaves who are, after all, but pawns in the liands of combines or monopolies. The producers of the raw leaf in this country, enable us to get a better smoke at a lower price than is th'e case with im- | ported goods. Quality and satisfaction, cheapness combined with high value, patriotism blended with sound econ- | omic wisdom, these /and many other j good features are all bound up with the successful growing and manufacturing ! of New Z'ealand tobacco.

! The Profit and Loss Account is probably what interests shareholders in any company to the greatest extent. In this case there are two dividends well and truly earned, namely, 8 per cent, on the preference shares and 12 per cent, on the ordinary shares: In •both cases this has been the happy results in the two balance-sheets issued

Iby this prosperous company. It has started well, and "has never looked back." The gross profits are £4OOO more this year. The company has wisely decided to build up a reserve fund, and, to that end, has opened its first visible reserve fund at £3OOO. That operation is equal to 10 per cent, en a paid-up capital of £30,000. A splendid new factory ond plant to the value of £10 ; 000 has slipped into th-j ownership of the shareholders, for which they have not paid one penny; it was all made and provided from the profits of the business of the company; this latter is a secret reserve to the extend of 1 33 l-3rd per cent, on £30,000. Adding both together, the company has in a period, of 34 months built up reserves amounting to over 43 per cent, of tho invested capital. It would be waste of time and space to add anything in the way of comment to this wonderful | achievement. The facts speak for themselves. On these figures the' shareholders are the owners of a business cheap at £IOO,OOO. ' Let, them, by every lawful means, keep it forever, I and let them never forget J;heir indebtedness to the splendid management of > Mr. Husheer, and tlfe honest board of directors who so ably assist him to carry out the sound business policies of this local company, and the magnificent | assistance which that gentleman has rendered to the man on the land who provides the raw material that makes the splendid manufactured article— New Zealand grown tobacco.