PATEA FREEZING COMPANY

Taranaki Daily News, Volume LV, Issue 99, 12 September 1912, Page 8

PATEA FREEZING COMPANY

CRISIS IN THE COMPANY'S HISTORY.

An important meeting of shareholders in the above company was held at the company's works, Patea, on Tuesday, to consider a crisis which had been been reached in the company's history (says the Hawera Star). Thirty odd. shareholders attended, and the deliberations lasted over four hours. Very briefly summarised, the ■position was as follows: When the present company took over the works the shareholders provided, roughly, £6OOO capital, which it was intended to utilise as a working capital; but the directors found it absolutely imperative to erect new buildings and put in new plant. This absorbed practically all the £6OOO subscribed capital. In addition to this the directorate had guaranteed a bank overdraft up to £14,000, and the experience of last season particularly had amply demonstrated that the company could not successfully carry on unless they had another £6OOO to £IO,OOO as working capital. An appeal to shareholders to provide this, by means of promissory notes (pro rata with shares held), to be lodged in the bank as security for further advances as required, had proved abortive. The directors, considering that they were already carrying more responsibility than they were called upon to do, declined to shoilder any further burden. They argued, and rightly so, that under existing conditions shareholders reaped the benefit of arty profits which might ibe made, but the directors, as guarantors of the £14,000 bank overdraft, were liable for any loss which might occur. It "was now impossible for the company to successfully carry on operations without additional capital, and this the shareholders had declined to provide. The directors, therefore, asked shareholders to authorise them to sell the whole business in order to liquidate their liabilities. Mr. Walter Powdrell, chairman of directors, presided, and in introducing the business mentioned that an interim balance taken up 'to June 30 last showed a loss of £167, to which had to be added a half-year's bank interest. At the present time the company was run practically by six men, who guaranteed a bank overdraft of £14,000, and in addition .had to find capital if they made any shipping contracts. If there was any profit, the farmer, shared it; if any loss the directors were liable.

After considerable discussion, the following motion was carried: "That the meeting authorise the directors to increase ifche capital «r' the company by the issue of preferential! shares, or by bonds, or by any other method they may think fit, and if, after consultation with the following committee of shareholders, namely, Messrs. Dickie, Death, Willis, 0. Hawken, C. Hawken, A. Symes, Tonk9 and Christensen, they find tliat they cannot get the necessary capital, then they be authorised to sell the works to the best advantage by public auction or otherwise."

CO-OPERATIVE FREEZING WORKS.

Writes the Waitara Mail:—The proI posal from the Kaimata branch of the Farmers' Union that farmers' co-opera-tive freezing works should be established in Taranaki is not having a very good run. Mr. R. Dingle, the chairman of the Stratford A. and P. Committee, and a shrewd business man, pointed out that in days gone by a company of farmers from various parts of Taranaki had run freezing works in Waitara, but they found they eo'.ild only proceed on very limited lines, and their operations, a'o tramped, had not the potentialities for the farmers that were later to be found within grasp. We may hero explain that the private company controlling the industry at that tune ran its affairs on sound business lines, but at had not the capital to purchase all the stock offering, and a good deal of it went to buyers from elsewhere. But the graziers did' not realise full value, because the purchasers had to allow for loss of condition consequent on long road or railway journeys, and, moreover, the outside buyprs were freed to an extent of competition. Then the private company, seeing where the shoe pinched, made up its mind to sell the works, and Bort'hwick's came on the scene. These people, having command of big capital, and being in a position to sell their meat at top prices in Great Britain, completely altered the state of affairs in Taranaki, and whatever the farmer had to sell in the shape of healthy stock for- freezing the firm readily bought. They have invariably given the best prices, and their business in Taranaki has grown to large dimensions. There is no lack of enterprise on their part; immediately there is justification for it, the buildings and plant are made to cope with the increased offerings, and it may here be mentioned that for this season there is to be an extension of the freezing machinery.