COLONIAL SUGAR COMPANY.

Auckland Star, Volume LXIII, Issue 59, 10 March 1932, Page 4

COLONIAL SUGAR COMPANY.

ATTACKED IN AUSTRALIA,

CHAIRMAN'S REPLY,

An attack upon the Colonial Sugar Refining Company, Ltd., by the Commonwealth Attorney-General concerning the price at which it buys and sells sugar in Australia, and its profits, has been replied to by the chairman of the company, Mr. Edward W. Knox. In regard to the charge that. the company gives no details of earnings, Mi. Knox quotes from his report at the half, yearly meeting of shareholders in May, 1930 in which he said:— "Some people imagine that those concerned in the manufacture and refining of the sugar produced receive urn ;:e profits, but we have'a smaller return than before the war. This will be when I sav that we would be satisfied it, year in and year out, we had a working margin for the milk, after providing working expenses and 4 per cent tor depreciation, of one farthing per pound.of sugar produced, while, for refining it, the gain is less than half a farthing, the difference being due to the refinery running throughout the year, while the mill does not average a six months season. "Of our profits, more than a fifth goes in taxes, consequently we work for a margin corresponding with that obtained in England and the United States. The chairman of the great refining business of Tate and Lvle told the shareholders tho other dav that their working margin was one-tenth of a penny per pound ot refined sugar, and in March the American Sugar Refining Company, that handled one and a quarter-million tons of sugar m the year stated their profit at the equivalent of half a farthing per pound of sugar, after providing 'for taxes and depreciaSince then the general manager of the company has twice given evidence before the Sugar Inquiry Committee, explaining the whole position and showing that the company was not responsible for dear sugar, the greatest factor in which is the Commonwealth bounty for raw sugar of £30 a ton. "It should be unnecessary to point out to a trained accountant," says Mr. Knox, "that when the shareholders' interest in a company likes ours stands at a figure much below the cost of its investments, and there is no interest to pay on borrowed money, a very moderate return on tho whole outlay would give a considerably highes figure for the dividend on the shares. In our case the proportion is about one to three, so a dividend of 12% per cent gives a little over 4 per cent on the original outlay, which has been £18,000,000."