DAIRY COMPANIES.

Taranaki Daily News, 2 September 1920, Page 8

DAIRY COMPANIES.

WAfTARA-TARANAfct. The twenty-second annual meeting of the Waitara-Taranakl Dairy Co. Ltd., was held at the factory Waitara Road, when Mr. J. H. Smith, chairman of directors, presided oyer an attendance of about 60 shareholders. CHAIRMAN'S ADDRESS. The chairman pointed out that as a result of the steps taken by butter producers ... place before the Government the dlsabll'ties they were suffering in having to supply butter for local requirements at much below export value, the Government had decided to vote a sum of money sufficient to nuke up the difference, and their company had received as its share £1948 3s 6d for the 1918-19. season, and also £039 43 Bd, being half profits for the 1917-18 season. On the last season's output, they had been paid up from time to time. In order to ensure an ample supply for New Zealand requirements the Government had purchased for the Imperial Government the whole of the butter in store, giving the Imperial Government an additional %d per lb. to recoup them for storage, etc. and the retail price had been raised 6d per lb. They had had to take up additional shares in the Egmont Box Co, practically doubling their holding, and now held 933 shares fully-paid up, and £1696 paid up to 2s. The Box Company had practically completed negotiations for a lar?e urea of timber, and they were now assured of a supply of white pine for boxes for some years to come. The Box Company also- appeared to be working on safe lines, writi?* off large sums for depreciation, and not being out to pay dividends, but to supply boxes and crates at the lowest possible price. Owing mainly to the shortage of shipping, entailing payment of extra storage charges, etc., the results of the casein making had not turned out as satisfactorily as expected, but it was anticipated that a final payment would bring the amount distributed up to lid per 100 lb. of new milk used for the purpose. For the coming season they had been able to make 'what the directors considered a much more satisfactory arrangement, assuring them Is per 1001b. of milk for lactic acid casein, and %d per 100 lb. milk rennet casein, in addition to the cost of manufacture. Rennet casein would necessitate installing agitators. The output last year showed an increase of 1" tons of butter, as compared with the previous year and constituted a record for the company, whilst the overrun was the same, 1V& per cent. Fuel cost £602, a decrease of £2O. The question of obtaining sufficient fuel to keep going during the year had hsen a source of anxiety, but the difficulty had been got over as far as possible by getting in a stock of firewood as a stand by, and also to eke out the available coal as far as possible. Salaries and wages showed an increase of £2lO. This, however,! was the general experience all over the Dominion. The directors had endeavoured to do their duty by their employees, 1 who, as evidenced by the satisfactory results, had.-he believed, done their duty by the company. The property account, he said, had increased by over £IO3O, unainly due to the cost of Installing a new drain from the factory to the Waiongona River. He pointed out that the bank which held three Joint and several accounts totalling £3OOO, and containing over 400 names, ware desirous of obtaining a new one, and the directors recommended that a new one should be executed for £2500, thus reducing their 11al/illty by £SOO. He then formally moved the adoption of the report and balance-sheet. This was seconded by Mr. R. Giddy. THE DISCUSSION. Mr. De Launay considered that the time was ripe when some new system of finance should be adopted, as the present was antiquated, and out of date. Some of their suppliers had been supplying for the past 20 years, and had had %d per lb. butter-fat deducted amounting probably to over £2OO, and had nothing to show for it. It might be said that they had their value In the usa of the plant, and so they had up to a certain point. He considered it would be a far better proposition if they were tliis year, when they wore to get 9d or lOd more than the previous year—a better price than they had ever dreamt of, even In their wildest dreams—to make a deduction of 1(1, per Hi butter-fat, and place the amount equivalent to about £I7OO to SJ2OOO to a reserve fund. In two years they ivould have a fund of £4OOO which tvvuld place them on a sound financial basis, dud do away with the necessity for the •,ic! deduction. Mr. W. McCaul held that something should certainly be. paid off, but they should not clear off the factory altogether. It was .not fair to present suppliers to bear all the burden. Mr. De" Launay said that as the money waa deducted, it should be placed to the credit of the supplier as share capital and interest should he paid thereon. Mr. Tumbull said that this would entail payment to dry shareholders. Mr Hall said that in the early days, suppliers bought shares as low as 2s 6d, and were drawing 6 per cent, interest on fully, paid up shares or equivalent to about !J0 per cent. That woe one of the reasons why the present system was adopted. He did not consider it was antiquated. Mr. Hall pointed out that they had 40D shareholders and only 87 suppliers, and if they had paid Interest on dead shares they would not have been able (o pay but so much that day. Mr. De Launay Raid, that thoy should not pay interest to dry shareholders. Mr. Tate pointed out that in the early days they paid hard cash into the company, and had nothing to show for it. The chairman pointed out that their old shareholders still had their shares, and under the new joint and several they would ha relieved of any liability to the bank. Mr. Do Launay said that the time was rlp» for' the establishment of a dual plant. He ventured to say that if they had established a reserve fund they would have had a dual pla.nt ore this, and as showing what the company had lost through not manufacturing cheese, ho instanced North Tarnnaki, which had this year sold its cheese, at Is 2 9-lOd per lb., a price which he calculated on (he yield of 2.70 that North Taranakl had got last year would enable them to pay out 3s 2',id per lb.' butter-fat, as compared with 2s Cd for butter and 3d for casein, a total of 2s 9d, making a difference of s&d per II). hulter-fat. This, on the basis of the last year's working, made a difference of £BSOO. The argument brought forward by the directors was that cheese would not be'made profitably with milk tewing 4.1. This, he considered, was an absolute error, as lie knew of a. factory that had a yield of 2.66 lbs. on, a 5.0 test. They also trotttjrt out the argument that the time was not ripe for building, on account of the high cost »f timber. Well, he ventured to day that it wculd never be any chouper then It was to-day There was no more opportune time than the present for setting aside a reserve fund which in a couple of year's time would finance the installation of a cheese plant. The chairman stated that Mr. De Launay had apparently overlooked the over-run, as with butter at 2s fid they could guarantee lo pay 2s 7%d per lb butter-fat, and wllh casein at 3%d they would make a total pay out of 2s lid. Mr. De Launay had taken «n exceptional factory for comparison. High testing factories like Lepperton,' Bell Block and Tnrlki did not expect to pay out as much as 3s 2d. He favored depreciating the properties in the good limes, so as to be prepared In case bad times should come. If they wore to put up a cheese factory now they would have stringent bank regulations lo cope with. ne favored a dual plant, but at. present he believed the prospects for buffer and casein would prove H .better proposition than cheese. Mr. Peterson favored the establishment of a sinking fund. A man should always be prepared to lenvo his factory in a better positon than he found it He considered u factory of any size should have a dual plant. He also held that the over-run of 17% per cent, was too low. It should be at least 19 per cent. Mr Andrews understood that their manager was incorporating aa much moisture in the butter as the regulations would permit, and lie therefore thought the over-run should be higher. The chainninn considered the over-run was a satisfactory one. Their factory was one of the most consistent moisture testers sending butter through the works, The resolution was then put and carried. ELECTION OF DIRECTORS. For the two vacancies on the directorate caused by the retirement vt Messrs. A. fiotve and J. H. Smith, there were four nominations, and the election resulted as follows: Messrs. J. H, Hmilh I.'IO. A. .1. Arms 75 (elected), L De Launay 62, A. Rowe 60. The chairman expressed thanks for being returned at. the top of the poll, this, he said, was a surprise as he had heard that he was golnir to be kicked out. Mr. V. Duff was re-elected auditor. The chairman'* honorarium was fixed at £6O, and the directors' at 15s per meeting. GENERAL, In accordance with notice of motion, Mr. Do Launay moved in the direction of altering the Articles of Association, so as -to provide that the annual meeting shall be held during ihe last week in July, instead of the first week In September as at present. This was seconded by Mr. Peyn and carried. Mr. G, y, Ut» moved that the Olttctora

be recommended (o pay a bonus to the staff. This was seconded by Mr. De Launay. Mr. Peterson imoved, as an amendment, that no bonus should be granted, but that the directors look carefully into the question of j salaries with a view to Increasing them if I considered desirable. He said that he favored paying good salaries in preference to "bonuses. This was seconded by Mr. Hancock, and after a little discussion, the amendment was carried. In reply to a supplier, the chairman said that the directors would have to consider the question of paying extra to the cream sup-. pliers, They now had the Wanganul com-j panies running In their midst. . A supplier stated that ttic Wanganul company had guaranteed 2s 4d with the possibility of a bonus and carted the cream from the suppliers' door. The chairman thought they would be able to pay out at least l%d over the amount received for the butter. They would have to consider the question of' either carting cream or paying a little extra as compared with milk. Votes of thanks to the directors concluded the meeting. CHAIRMAN OF DIRECTORS. At a subsequent meeting, Mr. J. H. Smith was, re-elected chainman of directors, FRANKLEY ROAD. The twenty-third annual meeting of the Fra'nkley Road Dairy Company was held at the Frankley Road factory last night, when Mr. A. Gudopp, chairman of directors, presided over an attendance of about forty shareholders. . ANNUAL REPORT. The annual report congratulated the shareholders on a most successful year's working and lnoreased pay out. For cheese making there were received 3,699,700 lbs. of milk, containing 146,342 lbs. butter-fat, making 374 000 lbs. of cheese (factory weights) being 167 tons against 154 tons last year. The average test was 3 95; the lbs. of milk per lb. of cheese, 9.89 lbs., and the yield 2.55 lbs; 48,992 lbs. of milk were received during June and July for butter-making, containing 2116 lbs. butter-fat. After writing off depreciation at 5 per cent., and again setting aside £133 6s 8d for reserve, your profit and loss account shows a credit balance of £2502 3s, which your directors recommend be paid to suppliers by a further payment of 4d per lb. of butter-fat supplied for cheese-making, and 2d per lb. for the small butter-malting period, making the pay-out 2s per lb. for cheese and Is 8d for butter. ' Table of quantities and averages as compared with the previous '-year in parenthesis: Number of suppliers, 45 (38); milk received, 3,748.761 lbs. (3,400,118 lbs); butter-fat, 148,4*8 lbs (141,177 lbs); cheese, 374.000 lbs. (345,600 lbs.); average test, 3.95 per cent (4,2 per cent.); lbs. milk per lb. cheese, 9.89 lbs. (9.8 lbs); lbs. cheese p>r lb. butter-fat, 2.55 lbs. (2 44 lbs.); average grade, 89.76 per cent. (89.56 per cent.); average pay-out, 24d (21d). The balance-shct showed that the total receipts were £18,328, whilst expenses amounted to £3277; £97 had been written off for depreciation and £133 placed to reserve. CHAIRMAN'S ADDRESS. In moving the adoption of the report and balance-sheet, the chairman, congratulated suppliers on the very excellent result of the year's working. Though the output was a little below that of 1918, the pay-out constituted a record in the history of the company. Taking the whole year for both < butter and cheese-making, the pay-out aver- ' aged 23.95 d, while over the cheese period Is 9d for last year. The output shows a considerable incroase, being 167 tons as against 154 for 1919. A motor lorry had ' been purchased for the cartage of milk from the Vogeltown end of the dlßtrlct, but as the supply did not come up to the amount promised, the truck was disposed of and the contract system reverted to. Dealing with the balance-sheet, he said that the cheese sales had increased by £llOO and butter sales by £770. The cost of fuel had increased by £IOB. Coal was not obtainable' so they were depending on wood, which had also increased in price. Repairs and renewals had entailed heavy expenditure amounting to £323. As It was absolutely necessary to give the plant a good overhaul to secure satisfactory running. In spite of heavy charges the Increased yield and increased amount of whey butter, together with refund of storage charges, had brought i down the f.o.b. cost from 2d per lb. of , cheese and butter last yoar to 1.82 d this ! year, and the cost of manufacture .tfas 1 25d J per lb. as against 1.33 d the previous year, j As the present refrigerator was quite inadequate, a new one had been ordered. ' The shipping outlook had Improved, there being frj less cheese in store than at the j same period last year. The company had only 424 crates In the freezing works at the ! present time, and. it was not anticipated ' that (here would be much of that left when a the new. season's cheese was ready for ship- , went. { With regard to the. coming season's output, ' the chairman said the Imperial Government ( released the control of the marketing of , cheese and factories had been able to n>;ke their own arrangements for the disposal of ' the new season's output. The directors ] were pleased to report that the company's i output to the end of May, 1921, had been i sold to Messrs. Collett and Co. Ltd., for Is 2%d fo.b., with no risk as to the rise of ' freight. This was believed to be ono of i the best sales made by any dairy company this year. He expressed pleasure at the company having resumed business connections with Messrs. Collett and Co., who had handled i the company's output, he believed, continuously since Its formation -23 years ago, until the Government commandeer, which was ' surely a unique record. i The directors had acted on the authority i given Inst • year, and had mode advance's totalling £lßll 17s 6d to seven suppliers 1 principally for the purchase of cows. s In conclusion, he thanked the manager and \ staff for their loyal service to the company during the season, and asked suppliers to do 1 their part by supplying milk In f.rst-class ] condition, as both quantity and quality of i cheese produced were dependent on the quality of the milk supplied. ! He then formally moved the adoption of ] the report and balance-sheet. i Mr. L. Hill seconded. In reply to questions, the chairman stated that the cartage had cost 7s per ton on the : output more than the previous year. This '. was due to the loss on the motor lorry. i Mr. Baker pointed out that the saving In the shrinkage of the cheese, which he estimated at £2OO the previous season, more than compensated for any loss on the motor lorry. ■ Tho resolution was then carried. ELECTION OF DIRECTORS. For the four vacancies on the directorate caused by the retirement of Messrs. F. Baker, f! Burkett, P. Gilbert, and E. J. Popperell, tliero . were seven nominations, and the election resulted as follows: R. Wood 70 E Pcpperell 04, G. Burkett CO, A. F. Vowle":? 56 (elected). V. Gilbert 48, V. Adlam 43, and P. Gilbert 41. Mr. C. H. Wynyard was re-elected auditor, the fee being Increased to £7 7s. GENERAL. Mr F. Bakc-r wished to know who had signed the joint and several at the bank, and he moved that all be asked to sign before taking part in the business of the company, and that the monthly cheque be held back vf.tll such shareholder has signed Mr. Kill seconded the resolution, which was carried. On the motion of Messrs. B. J. Baker, seconded by F. Baker, the manager was ,oted a bonus of £2O, and the first assistant JP"» for last season. * Tile chairman was voted an honorarium of £ls, and each director 10s for each meeting attended. Mr. E. .T. Baker urged the directors to look into the question of suppliers taking more whey than they were entitled to, A hearty vote of appreciation was accorded the secretary, Mr. R. J. Pepperell for his services during the past year. The chairman remarked that the directors had alnady recognised his valuable service in a more substantial manner. A vote of thanks was accorded the chairman and directors for their services. After business concluded, light refresh- j \ ments were handed round, which were greatly appreciated. , ELECTION OF CHAIRMAN. 1 At a subsequent oneeting of directors, Mr. ' A. Gudopp was re-elected chairman of i directors. - ;