PATEA FARMERS' FREEZING COMPANY.

Taranaki Daily News, 12 September 1917, Page 7

PATEA FARMERS' FREEZING COMPANY.

ANNUAL MEETING, The annual general meeting of shareholders of the Patea Farmers' Co-op. Company was hold at iPatea on Saturday. Mr. W. D. Powdrell, chairman of directors, presided, DIRECTORS' REPORT. ±he directors presented the following report:— Although the quantity of stock treated shows a considerable decrease, the freezing stores are almost full at present, owing to the shortage of shipping. Particulars of killings are as under, the figures for 1916 appearing in parenthses:—Season ended July, 1017: Cattle, 8450 (10,572), decrease 2122; calves, 1530 U504), 1034; sheep and lambs 28,341 (43,708), 15,453. The year's operations have been onerous and coa f ly in every respect, the lack of Home shipping being very heavily felt. Our stocks have accumulated beyond any previous records, resulting in our liquid capital being correspondingly locked up, thereby incurring Wavy interest charges. The profit and loss account, after providing the sum of £1550 6s 3d for depreciation, amounts to £904 0s lid, making the total for appropriation £14,723 8s 9d. A matter considered by your director? as of extreme importance is the provision for sufficient storage accommodation, it being almost certain "that all worka will bo blocked soon after the commencement of the new season. Your directors have already sufficient plant and extra ammonia piping on hand to eopo with any extra storage that may be erected, but the question of necessary capital must bo one foi shareholders' decision, and we are enclosing circular letter showing stocks held in freezing works throughout the Dominion at the present time, and also asking for your Bupport in taking further shares..

The thanks of the company are again due to your directors, who during ttoe past year have found £23,000 for the company'e usa as working capital, besides guaranteeing the company for another £BO,OOO. This shows a worthy spirit and confidence in the company'. l ) r.ffaira, which is most gratifying. CHAIRMAN'S ADDRESS. In moving the adoption of the report and balance-sheet the chairman said he felt sure that shareholders would recognise that it was fairly satisfactory considering the severe competition they had had during the past season. New works had started at Wanganui and New Plymouth, and in addition to this extra competition the directors anticipating a shortage of shipping space, decided not to bring any cattle from Auckland. There was a decrease of 1034 veal calves, but the directors were not anxious to have them; they took them from customers, but all of last season's veal and half the previous season's, was still in store, and when it would be shipped no one knew, They had bought the farmers' calves and had £IO,OOO worth of veal in their store at the present time. Sheep and lambs showed a decrease of 15,453, and there was a reason for that. The Patea Co. had always been sadly short of capital; the directors had hitherto to place what funds they had to the best investment, and that was in storage, although they fully recognised the. urgent hclhl of a fellmongery. But they had not the money to build one, and so they had to' dispose of their pelts to those works that had a pickling plant, and last year they absolutely lost 3s to 4s on each sheep and lamb from this cause alone. They knew that they were losing this amount; and they knew that under those conditions they could not compete with other companies and show profit on sheep and lambs; but rather than disappoint their regular customers they took their sheep, even at that loss. Shareholders would have noticed from their balance-sheets that the company had only £23.309 paid-up capital. Their assets, not including stocks of jneat, etc. amounted to £50,412, after heavy depreciation during the last three years had been written off. The works were built at pre-war prices; the book values had never appreciated, and they had hardly a single piece of old machinery in the place. That demonstrated how badly undercapitalised the concern was. Their stocks of meat, tin plate, etc., amounted to £89,920, so that shareholders would see, that, if it had not been for the financial assistance given by the directors it would have been impossible to carry on the company. They had si<mnd a join and several for £BO,OOO, and besides that had on deposit £34,000, and this amply proved the confidence they had in the success of the company. After writing off £1550 for depreciation last year, they showed a profit of £904, hut there was an amount that would increase that by about £IOOO. Since their balancesheet was made up the Government had decided to pay continuous storage, so that, with the extra £IOOO the company had done very well this year, in comparison with other companies, and takiug into account also the disadvantages they worked under through having no fellmongery. During the past vo ir the directors decided to erect a new fellmongery, and this would probably <w.t £'.iooo and £4OOO and they hoped to have the new machinery for it to hand before the new ncason commenced. When this was in operation they would be able to compete with other works and handle wool and pelts from customers' sheep and lambs systematically and speedily. They would then bo in a position to give farmers all that there was in the animal. All meat was now sold to the one source at the ono tariff, but in spite of this fact half the farmers still persisted in selling to outside buyers. Half of the old fellmongery had been let to the Nev," Zealand Rennet Company, and (hat industry should help the Patea Freezing Com* pany in competition with other works. It was possible that they would be able to use lambs' veils for rennet making, and if this proved to be so it would be a matter of some importance. Their manure works had been successfully carried on during the past season, and the company could have sold the whole of its output to one firm, had it so desired. Thev had, however, endeavored to hang on to their stocks ia order to be able to supply farmers, but he would remind them that if they wished to secure any they must put their orders in. It would help the works considerably if they went ir.to the retail butchery business. It often happened that they had lambs that had been badly dog-bitten or bruised in trucking, and it would mean that if they were in the butchery business they could do a great deal better in such cases than having to can that meat. A little while ago a circular was sent around to farmers pointing out the urgency of providing another £SOOO for extra storage before next season. Already their stores were half full, und the •Act tliaC the Govenanait mawmfrvii Ou

serious shortage of shipping—there would be only seven boats leaving Neu Zealand between now and the end of October—was evidenced by their readl-1 nesß to finance- anyone desiring to provide storage. There was every indication that by February or March next a" the works would be full and competition would then be considerably reduced. The response to the circular was most disappointing, only 12 shares, or £GO worth, being for. Compared to other places, Patea had remarkably cheap works, and every £0 share was now worth £lO. He was instrumental in starting the freezing works at Wairoa, and there for a storage capacity of 70,1100 to 80,000 caicases the cost was £OO,OOO. He was advisory manager of the Whakatanc works, aiul there the works cost £135,000 for a storage capacity of 80,000 carcases. Patea had a bigger capacity than either of these places for a cost of only £sfi,o|oo after very heavy depreciations had been written ofV. Unless shareholders or farmers agreed to take up additional shares and provide the extra storage he now asked for, they would lose hundreds of pounds during the coming season. Apparently they were willing to let the directors go on guaranteeing the finance, and this was an altogether unfair position for them to take up.

THE DISCUSSION. Mr. O. Dickie seconded the motion. In doing so he urged upon farmers the desirability of increasing the storage capacity at the works before next season. The circular only asked for £3OOO extra capital to provide capacity for an additionai 30,000 carcases, and this should not be a big hurdle for the farmers between Hawera and Wanganui. Mr. Parsons suggested that preference should be given to those shareholders who provided the new capital for the additional storage; that towards the end of the season they should bo given thi opportunity of taking up the space for the last few thousand carcases. If something of the sort were not done and farmers could get the same treatment with or without the extra capital where was the inducement to put in more money? The chairman Raid that the company could not give the preference "suggested by resolution or by articles, but. it could give preference in the office. They always gave first consideration to shareholders who stuck to the com> panv either with their stock or their money. However, he hid no doubt that, with the extra storage that he was now asking shareholders to provide, there would be sufficient space. The storage charges that the Government was now paying would pay for the new chambers in one season.

Mr. Hawken remarked that it seemed clear that they would have to keep on building storage if necessary ratheithan let their stock die in the paddocks, that is what) it would mean if there was a shortage of space and a shortage of boats. After some further discussion the motion for the adoption of the report and balance-sheet was carried.

The retiring directors, Messrs A. S. Tonks, C. Dickie and C. R. Honeyfield, wero re-elected unopposed. Mr. E. C. Horner was re-elected auditor at a remuneration of 35 guineas. Mr. Christensen moved that the directors be voted an honorarium of £SO each for their past year's work.' He had wondered why they did not take the works over and let the farmers go. ■—Mr. Parsons seconded the motion. If any shareholder thought the directors had not earned that amount let him become a director and try. The chairman said that he would always oppose talcing the works out of the farmers' l\ands. He valued every shareholder even though he might only subscribe £5.

The motion was carried unanimously. Most of the directors re-invested their honorarium in new shares, taking up £250 worth, and allowing _ their honorarium to go as a first deposit. A canvas made in the room resulted in nearly £2OOO worth of new shares being subscribed. —ptar.