EXPANSION PLAN.

Auckland Star, Volume LXX, Issue 37, 14 February 1939, Page 10

EXPANSION PLAN.

WOOLLEN

INDUSTRY.

BETTER TIMES AHEAD? IMPORT CONTROL RESULTS. After years of struggling against high costs and intense competition from importers, New Zealand manufacturers of woollen goods now appear to have better times ahead. Restriction of imports under the licensing scheme will check one of their main difficulties— competition from overseas—and a big increase in output by Dominion mills is expected to result.

Already there has been an increase in orders for certain classes of goods and as stocks of imported woollens in the country begin to dwindle, an all-round expansion in the demand for locally manufactured cloth is foreseen. Rising prices for shares in local woollen manufacturing companies reflects renewed confidence in the future of the industry.

Local mills report that their marketing outlook, has indeed improved but that there are still difficulties in the way of expanding production. Wihile ample supplies of raw wool are available, skilled operatives are hard to find. High wage costs and restrictions on conditions of labour provide another obstacle. Encouraging Sign. As the object of the Government's policy to encourage local secondary industries has been made clear no difficulty is expected in obtaining from overseas the supplies of machinery necessary for expansion. Companies regard a questionnaire submitted by the Government as an encouraging sign. They asked for information on numbers employed, raw materials used and other details of present operations, and also for particulars relating to possible expansion.

The labour question appears to be the main obstacle in the way of New Zealand becoming a large woollen manu-

facturing country. There are enormous supplies of raw wool considering the size of the country, and a wealth of power available for running the mills— only fnan-power is missing. Profits Have Fallen. Even with this problem to face, the industry looks forward to a period of active trading and improving finances. Some encouragement is badly needed, as profits have fallen rapidly in recent years. Two large companies which were earning substantial profits and paying good dividends three years ago, showed a loss on last year's operations, and all companies' earnings fell sharply. The following table gives the profits earned in the past three years by seven leading companies, representing £850,000 of paid-up capital: — 193 C 1937 1938 Company £ £ £ Bruce 5,872 3,154 119 Knin |>oi 22.U56 15.417 12.643 Mnnawatu .. 5,079 3,702 »166 Mosßiel 14,121 13.203 *0,89S Oamaru 8,308 8,571 *7,169 Tattersfleld . 13,704 18,145 3,123 Wellington .. 20.051 18,534 14,997 •Loss.