HUGE FORESTS.

Auckland Star, Volume LXIX, Issue 254, 27 October 1938, Page 5

HUGE FORESTS.

OF WHAT VALUE?

REALISATION PROBLEMS.

DIRECTORS' VIEWS

The future of tlie hupp pine forests of the Taupo;Atimuri and Kotorua districts was again up for discussion to-day at the annual meeting of shareholders in X.Z. Forest I'roducts. Ltd., the £ 11.000,000 company which is now in possession of the forests.

At to-day's meeting, held in the company's office, South British Buildings, the chairman of directors, Mr. 1). Henry, presided aiul other members of the boaid present were: —The Hon. Sir Charles Mai r and Mr. H. Landoti Smith (Sydney), Mr. S. .T. McCJibbon IPerth). Messrs. C. M. Bowden and K. G. Buckloton (Wellington; and W. Eraser (Auckland].

After outlining the circumstances unjler which the company had taken over the forests from S.Z. Perpetual Forests, Ltd., the chairman stated that a report had just been received from Air. S. A. Clarke, of the Forest Division of the Council for Scientific and industrial Kesciuch. Melbourne, on the plantations, together with suggestions for a policy of utilisation.

"Whore are we heading for?"' said Mr. Henry was a question that was frequently asked by shareholders. It would, however, he premature tor him to attempt to forecast the lines of the company's future activities, which would he determined alter consideration of Mr. Clarke's report. There were, however, certain matters winch should he referred to. "Shareholder from time to time,'' said Mr. Henry, "write to the company's office inquiring as to the value of their shares and asking when they are likely to receive the substantial sum which many of them beliered would accrue to them within a period of 15 or 20 years. Xow, I desire to say firmly and emphatically that your directors can accept no responsibility for any estimated values which have been made of £250 per acre for woodpulp in approximately 15 years and £500 i>er acre for timber in 20 years from time of planting. Shareholders must appreciate that immediate returns are out of the question. The whole task of realisation lies ahead. The earliest plantings will not be mature for large-scale realisation for at least 10 years. Shareholders must look upon their investments as a longterm investment, while the probabilities at the moment all point to the fact that their returns will come in the form of annual dividends and not in lump sums. It is. however, apparent from the size of the plantations that it wilj be necessary for this company to develop a large export trade."

Sir diaries Mr.rr congratulated the shareholders 011 the completion of the task of compounding the contract with X.Z. I'crpetnal Forests, Ltd. He did not think they would lose by their investments. Xcw Zealand, he said, conld consume only an infinitesimal portion of their forests. In seeking an outlet they naturally looked to Australia, hut the present demand for pinus insignis in Australia was small. Something had to he done to discover and stimulate a demand for the output of the forests