OVERLAPPING DAIRY FACTORIES.

Taranaki Daily News, 1 September 1917, Page 7

OVERLAPPING DAIRY FACTORIES.

IX SOUTH TAEANAKI At (he .annual meeting of the T. L. Joll Co-operative Dairy Company, the question of the overlapping of some of their factories with those'of the Kaupokonui Dairy Company was touched on, arid a proposal that it was desirable to endeavor to effect some regrouping arrangement was discussed and defeated. At the conclusion of the onlinnrv business the chairman asked whether (lie meeting wished to discuss the question | of the amalgamation which was before suppliers at a meeting held in Manaia | recently. He quoted figures to show that 1 it would net be advantageous for the j Joll suppliers to join Kanpokonui on the terms offered bv that company. Personally, he did net think that amalgamation would result in suppliers receiving an additional %d per lb for their butterfat He Tecognised that the. position would be better if there were no overlapping, but the directors of either company could not tell the suppliers that they must join the other company to obviate this. That was a matter for the suppliers themselves. If the question of regrouping were considered at Kapuni it would mean either the enlargement of one of the present factories or the building of a new one for . preference on a better site at a probable cost of £3500," and that this was not the time to undertake such an expenditure. It was good policy at present to be very careful of their plant and buildings, and not carry out any improvements until normal times returned, unless they were forced. If it. could be .shown that they would be able to pay out either %d pr %d additional it might be wise to amalgamate. However, from a comparison of balance-sheets he was of opinion that a small concern under one roof manufacturing 500 tons should be able to beat a big concern which made the finished article at each branch. He did not wish to see the company at loggerheads with any other company, and would, therefore, like to see the matter threshed out. Mr. Lye, a director, stated Hint it was n difficult question, and one of such importance that it was impossible to expect unanimity. He pointed out that the directors of the. two companies had met, and the directors of the Joll Company had considered the proposition of the Kanpokonui directors not acceptable. A number of suppliers thought they should have been gicen information as to what had transpired, and it was for that reason lie had suggested the meeting that had been held at Manaia,- and he thought that he had served the shareholders well by so doing. He recognised teh disadvantages of overlapping, and they should try and find a means of croroetiug any wekaness that existed. It had been stated that competition was necessary in dairying, but he considered the only competition necessary was competition at the other end among the buyers? The producers should try to produce as cheaply as possible. There had been rivalry for years past between the factories, and if they wanted competition they could be assured the would get it, as there was already talk of Kanpokonui erecting a factory at Otakeho. Per-

sonally he did not mind if lie. went off the directorate, but ho thought some cn.deavor should be made to overcome the overlapping, and that if the two boards of directors were to meet something reasonable would be arrived at. Mr. (i. Meuli moved that it be a recommendation to the directors to consider the regrouping scheme. Ho hoard •that Kar.pokonui were going to build at Otakeho, ar.'l had been promised the support of half their suppliers. If Kaupoko* •nui did build, it would mean that .Toll's wolud lose all their supply, or, if not, Otakeho would be a drag. , Mr. Harrison seconded. Mr. .Tohnston said that he had mentioned the regrouping scheme 4 or 5 years ago. Five years ago their suppliers at ■Auroa only numbered IG, and the output had decreased from 31 cheeses to 21, whilst last year the suppliers numbered 27 and the output had increased to 39. That did not look as if they were losing ground. If they put the right men on the directorate to hold their end up they would not lose. The pay-out told every time. Mr. Eaves, Otakeho. did not believe that Kaupokonui would build. He had heard nothing to indicate that their suppliers would mot remain loya-h 'Personally, he. did not see that amalgamation would be beneficial. It might benefit the man with monoy, but not the- small man. ■One big concern would be able to dictate •to the struggling settler, whereas at present a. settler was able to obtain financial ■'ftßsisUuiie in taking up unimproved native land, and so increase the supply and bring about closer settlement. Moraover, one concern would be too large to manage, and what was saved in the salary of Cue general manager and secretary—a small amount spread over the whole company—would be more than lost : n the, leakage that would occur. The chairman said that the Joll directors had suggested regrouping, but Kau..pokonui would consider amalgamation or nothing. He contended that it was a .good thing to have, competition among

co-operative l)odies--not competition to I make prfits, but competition to save costs. By comparison of balance-sheets ■it was possible to detect a leakage, and tiike steps to remedy it. An amalgamation would mean that tlie company would have a turnover of £500,(100, and a leakage even of l-20d would mean a big tiling. H ewould like to sec a federation of factories U control the sale of their produce on the Home market, and obtain the ruling market price. At present they were in the hands of merchants, who, I hen tliq market was glutted, gave a reduced price. A federation would enable them to release the required quantity each week, and so keep up the price. While he did not generally like to contrast the balance-sheets of other companies, he pointed out that allowing for i interest on share capital, butterfat levy, I anticipated surplus, etc., their company j would pay out equal to Is ll.Ond per lb | butterfat, as compared with Kaupokoj r.ui's ■ls II.SM, or about oue-ninth of | a ;x»r.ny in their favor. This year both companies were under the same conditions regarding price and shipment, whereas before one company might only have a small quantity in a shipment that realised a high price and a large quantity in a shipment that realised a small price, and vice versa. The challonge made by Mr. Powdrcll had therefore been lost the frst year. He thought in the suppliers' interests it was best for each company to carry,on as they were. 'Personally he did not think Kaupokonul wonld entertain the proposal to build at Otakcho. To' do so would only mean starting the old fight, which they would hot take lying down, and the supplier would benefit all the time. | The resolution was lost on the voices.