STORAGE OF DAIRY PRODUCE.

Taranaki Daily News, 23 April 1918, Page 7

STORAGE OF DAIRY PRODUCE.

meeting of dairy factory DIRECTORS. extensive additions at motuROA AUTHORISED. That directors of dairy factories throughout Taranaki are fully alive to the position regarding the storage of butter And cheese next season owing to the congestion of shipping, was evidenced by the large and representative attendance of directors of shareholding dairy factories convened for Saturday by the directors of the Taranaki Producers' Freezing Works Co., Ltd., to consider the question of providing fur. ther additional storage at the works at Moturoa. Mr. Morton, chairman of directors, who presided, stated that the position twelve months ago in regard to shipping was very luisatisfactory and it appeared to be no brighter now, in fact, according to high authorities, it was not so good. Dairy factory directors were aware of the loss and inconvenience suffered through lack of storage last year, and tliere would be even worse congestion this year unless extra accommodation was provide ed A, large quantity'of cheese suffered through extra shrinkage on account of being stored in unsuitable buildings, whilst its quality also deteriorated. Last year when shareholders authorised them to erect tho additional accommodation, this was estimated to cost from £IO,OOO to £12,000, and it was resolved to increase each shareholder's shares by 50 per cent. Owing to the Government requiring the building to be insulated and cooled, tlio cost of erection was doubled, and shareholders were asked to increase their holdings by a further 50 per cent., which they agreed to .do. The financing of the recent additions had been satisfactorily arranged, the company having taken advantage of the : legislation which enabled them to borrow £7,/)00 from the, Government, and this had been, received after considerable negotiation. They were now faced with the position that though they had made additions to ac. commodate 35,000 crates of cheese, it was not enough During the present season the company had handled 110,SO6 boxes of butter, a decrease. of 24,703 boxes, due to the gradual change of a, number of factories from butter to cheese, which took up greater bulk They had received 101),079 crates of cheese as nsaingt 98,175 the previous season. This included elieeso held in stock in subsidiary grading stores erected by the Eltham and ICaponga factories. There were another 10,000 crates under the control of various factories, and these should be in the works. They now held in the works 43,90\l crates of cheese and, with 13,434 crates stored at Eltham, 2050 at Kaponga, and 10,000 in various factories, that made 70,000 crates awaiting shipment, so that when they recognised that during the last seven or eight months 50,000 crates had been shipped, they could well realise the prospects of getting 70,000 crates shipped in the four months before the new season opened. If the .store was not cleared before the new season opened they would be faced with a dearth of storage ] accommodation. He had not dealt with butter because during the. last four weeks, CO,OOO boxes ■had been shipped, but for winch they would not now be able to hold anything like the cheese thWf* had in store. It was, therefore, important that further accommodation for next season should be provided. Factories had stood loyal to the . company and had supported every measure for extension, but the question of further* extension was one for seridus consideration With the recent additions the accommodation they now had was sufficient for norma! times, but the directors considered that ,imder present conditions further'extensions were absolutely necessary and that the available capital must be found by shareholders. He did not think there was the. least prospect of the Government doing any more than 'they had already 'done, as when they set aside £125,000 for the provision of extra storage he felt they had given as far as 'they were justified in doing. The whole onus of finding the funds, therefore, rested with shareholders, who should be able to ararnge it. The position regarding the company's 'liabilities was satisfactory and with the large amount of) produce hi?!d *in store tliey should he able to show a profit Expenses had been exceedingly heavy and .may he heavier, but the increased storage charges should cover this. ■ The question for discussion was briefly whether or not in their opinion it was depirable to make still further additions to provide storage accommodation for nex't season, and if so, were they prepared. to find the cash? The directors were unanimous that it was necessary to provido additional storage. He hoped that the discussion would be from a broad point of view and that before long arrangements would be under way to provide the additions.

Mr. .T. S Connett (Bell Block) moved: That ill view of ihe unsatisfactory nature of the shipping provided for last season's produce, and of the financial loss and inconvenience entailed on shareholders of this company, and also of the grave outlook for the comm? season, and notwithstanding the additions that have already been made to the works, this meeting is of opinion that further cold storage is necessary and is prepared to consider any proposals from the directors to attain that end. The directors, lie said, had gone into the matter and were of opinion that immediate provision should be made for the accommodation of another 40,000 crates of cheese. They were a Jong way behind other places in the matter of storage accommodation, and he instanced Patea which had accommoda--tion for about three-quarters of the season's output, whereas ' at Moturoa they hardly had accommodation for half the season's o.utput. He did not think there was any need to stress the loss by shrinkage through inefficient storage, as most of them had lost heavily thereby—as much as 5s per crate—whereas they did not know yet what the loss in quality would be. It was the duty of the companies to see that extra stor* age accommodation was provided. He deprecated dairy factories building the accommodation at their factories, owing to the difficulties of transport to the port where a chance of shipment, as was often the case, suddenly occurred. The accommodation should be provided at the port, and he hoped there would be no hesitation in that direction. The nature of the accommodation and its locality had been given consideration and, if the motion was carried, it was the idea of the directors to provide the storage where it would bo of use when times became normal. Mr. R. Dingle, in seconding, considered as a practical farmer that it was absurd to continue manufacturing butter tod stow without having gome-

where to store it, He felt that each company could raise the necessary cash without dillicuHy. They had been 'right up :i»aiiiHt it 'lik season. Titer had at iimi's received notice to send no more butter in. '['hey were, however. loi'iiinate in getting their butter away, because if it had not gone they would, probably, have been shut out and so have suffered a serious loss Mr. YV. Honeyiield (Patua) thought Unit all favored the increase, provided the directors this time made the storage large enough. Mr. A roii (Urnti) also favored this. The companies would find the cash it the directors arranged for the building. Mr. Forsyth (Eltham) did not consider the proposals went far enough. They would be. able to accommodate 01 per cent, of the season's make of cheese and 2S per cent of the make of butter, or barely half one season's make of dairy produce, and he .felt that the directors would not be doing their duty unless they provided accommodation for._a whole season's output. It might not be required, but it. would at least be good insurance. When held any length of tiine where there was iio cold storp. cheese lost from two to five per cent, in shrinkage. His factory had put up its own accommodation to hold 1000 tons. TjVhile not wishing to stand in the way of the proposed additions, which he recognised were absolutely necessary, ho asked whether the chairman could stato if anv consideration would be given to Hawera and Normanhv shareholders in the company, who did not use the works, and Kaponga and Eltham, who had erected their own storage at their own expense, Eltham having expended £7OOO. The chairman said that the directors had not fully discussed that position. Those factories that had built their own storage did so at their own risk and not at the request of the company. The company, however, desired to treat them fairly, hut what form any consideration would take had not been decided upon. Mr. J. R. Corrigan (Hawera) expressed hi 3 disappointment at the limited amount of information given by the directors They were asked to provide £40,000 to build additions which tho directors admitted in normal times would be a white elephant. Extra storage was urgentlv required, but it was not wanted at Moturoa. .It was the duty of the New Zealand Government to provide storage as a national asset at the chief centres where, even jn normal times, it was lacking. Tire producers should approach the Government and make them erect the storage in Wellington. "They're our servants. YV T e are the people." The directors, lie thought, were approaching the position in a very narrow way in providing local accommodation, which would be payable during the war, but an expensive luxury afterwards. • The Government should be asked to erect storage spreading the liability on ail factories. .■His own company had met thein fairly in doubling their holding last time and t6ok a liability of £IOOO, but they did not intend to take a further liability, and as tliey did not use the works he thought it would be unreasonable to ask them. He. understood that at a' meeting in Hawera it was decided to wait on the Government and ask that cold storage should be erected and he favored this meetjng , being adjourned until the result of this deputation was known. If the Government refused to ilo it, then they could add to the local ivorks. They had done wonders in providing such up-to-date works, but any additional storage should be erectved at Wellington, where their produce would be sent. The chairman -considered that Mr. Corrigan was drawing a red herring across the sceHt. The resolution at Hawera referred to the question of payment of storage. They would be laughed at if they asked the Government to provide the cold storage. Moreover, if it were feasible, how long would it be before the storage was built? Again, after the war the Government would probably compel them to use the storage they lmd asked She Government to build,

Mr. Corrigan maintained it was the Government's duty to provide the storage, as it was a national duty Failing Government action, he would back 'rhe local directors up. < Mr. Freeth (WhiteclifTs) thought, the matter might safely be left to the directors. It was imperative that further storage should be provided, otherwise tho factories might not be able to finance.

Mr. Richards! (Cardiff) pointed out that when his factory had an opportunity of getting produce to the works they could not obtain trucks. He also complained of preferential treatment in the ■matter of space and thought that all factories should be given an equal .share. The /chairman stated that when the congestion became acute they had asked the Government grader to prepare a list showing a fair proportion from each factory sent in, and on that list space tvas allocate*!. Mr. Gibson (Rahotu) explained that some factories had arranged their own storage in buildings in town during the congestion. 1 The chairman did not consider' that the additions would prove a white elephant after the war, as they had been approached in the past by merchants who wished the directors, either to erect storage for them or to allow tlieip to erect storage on the company's land. The directors would erect the building so that it could be useful after the war and it would probably more than pay interest oil the cost. That, however, was beside the question, which wast Are you going to provido additional storage or not? In reply to Mr. 'fait (ICaponga) the chairman said that the company proposed to treat thorn in a fair way. Mr. Corrisan said that the directors must treat them alike. They could not discriminate without altering their articles of association. In reply to Mr. Gane (Normanby) the chairman said that the system of equalisation of freights wp.s still in vogue. 1 Mr. Gane asked what guarantee their coinpanv Mould have that space would be reserved if they gave notice that it would be required, providing they doubled their shares. They had, during the season, received word that space for 100 crates had been allotted them and found that the cheese had been placed in the refinery. Had they known it was going there it would not have been sent^ The chairman said all would get a fair deal. ° Mr. Forsyth said that he was personally satisfied that tlm" directors wot 1 ! give due consideration to those factories that had built their own stora.ge, but he had to ask the question. He was satisfied twelve months ago that f.he directors had not gone far enough when enlarging the works. His company was. compelled to build and had erected storage, for 13,000 crates, which was a distinct benefit to other companies, as it permitted that much more cheese ti? enter tlie works-

In reply to Mr. Gray, the chairman stated that it was proposed to erect, a. building to store 42,000 crates, at an estimated cost (if -,£21,000, and entirely separate machinery would be required at a further cost of £4,500 Mr. Cuddie stated that the building just completed was the finest cheese building in New Zealand to-day. Mr. Corrigan: He made the same remark at Pa tea, ' - Mr. Green (Rahotu) said that Eltham aiid Kaponga, who had erected .their own accommodation, should be given consideration. Mr. Dingle. (Stratford) said they had also built a, storage room, but it would not hi' a white elephant, as when not required for cheese he intended to use it for storing six months' supply of cheese crate shocks. Mr. Corrigan then moved, as an amendment, that the question be referred back to the directors for three weeks.. Mr. Gibson, (Riverlea). seconded. Mr. Gibson (Rahotu): If it takes the Government six or seven months to pro : vide £7500, how long will'it take them to erect the cold storage? Mr. Cbnnett expressed pleasure at hearing shareholders say that the accommodation erected last year wa? not sufficient. It was at first intended to provide accommodation for 25,000 crates but they afterwards put. in a second floor and accommodated 37,000. There was no question but they would endeavor to erect the building in such a way that it would be useful after the war. The amendment was lost on the. voices; and Mr. Corrigan called for a division, which was taken on the basis of one vote one factory, when the amendment was easily lost, only about five factories voting for it. The motion was then carried. Mr. Morton then moved:—"That the capital of the company be increased to £BO.OOO by the issue of 4,000 new shares of the value 'of £lO per share, and that such new shares shajll be issued on such conditions in respecj; of the payment of calls thereon and otherwise as the directors may, seem fit." This was seconded by, Mr. Forsyth and carried. Mr. Corrigan moved that the directors be asked to formulate some scheme whereby they will not tax l companies that are shareholders in the works, but, do not use them. Mr. Prestian (Jformanby) seconded. The chairman considered that ;this was a. fair proposition . .. Mr. Gibson (Rahotu) protested that the directors should not overlook the fact that factories who did not use the works were not assisting- in making profits. ' Mr. Honeyfield (Patua) : They will get full value when the Home boats .come to New Plymouth. "The motion was, carried. Mr, J. S Connett moved that the directors be authorised to proceed immediately with the erection of additional cool storage to accommodate 40,000 urates of cheese, or more, if thought necessary. Mr. R. Dingle (Stratford) seconded the motion, which was earned.