GREAT EXPANSION

Auckland Star, Volume LXXII, Issue 206, 1 September 1941, Page 3

GREAT EXPANSION

broken hill proprietary

IMPORTANCE IX DEFENCE

'"The company has provided Australia *ith one ot the greatest assets a countrv tan have—the cheapest steel in the ■ Sa ' d u Mr " ( V l>«rling. chairman, addressing the annual meeting of shareholders ot the Broken Hill Proprietary Company, Ltd., in Melbourne last week. f 02l o-s fen f', 1S t0 th , e 11CL ' profit of alter providing i'OOrt BSI for depreciation, £1,050,000 for income tax and £456,330 for special depreciation on plant, machinery, etc., Mr. Darling stated that at first siyht depreciation liM>k . i* • 1 * ,va . 6 a very real cost in the steel industry; it enabled the company to take advantage of improvements in processes, technique and plant. All plants had been working to extreme capacity: in some instances 20-21 shifts a week. " The company was committed for over £2,000,000 in plant and equipment outside its ordinary business.

Mr. Darling mentioned that the company s technical officer** bad been able to produce bullet-proof steel free from cxpensive alloys formerly imported, and yet. Quite equal in its ballistic properties to that which it replaced. This should save the Government £500,000. Cheapest Steel In World n-nllTl??!? 1135I 135 been a ccrt *in amount of adverse in « on l e ,<luarteK of the amount of profits of the Broken Hill Proprietary, but I feel that this criticism has been due to a want, of realisation of the magnitude of the company, its capital structure, and the shareholders' funds invested. he added. "The net profit on thc c c shareholders' funds was 5.62 per cent for the year just concluded, compared with 6.01 per cent in 1940 and 9.1 per cent in 1939 (the last prewar year).

The company has been able to carrv on with the low pre-war prices of steel still in force a remarkable achievement and not equalled bv any o.,her steel works in the world. It is not due to any haphazard circumstances; it is due to some extent to the wise provision ot large stocks to provide against just such a contingency as this war. but in the main it is due to the fact that we are now reaping the benefits accruing from the expenditure of heavy capital sums in improvements to and extensions of plant over the last few years. The effects of this programme have enabled us to continue selling a low pre-war prices. I want to Issue a note or warning, however; costs are rising still further owing to circumstances over which we ourselves have no control, as well as to the exigencies of war."

Mr. Darling said the company was not now maintaining the valuable export market for commercial steel established before the war, although much very profitable business could be done. The output was being mainly confined to Australian use, although it was still possible to "look after our New Zealand friends to a limited extent." The Whyalla blast furnace went Into production smoothly In May, and was now supplying foundry pig Iron for Australia, also enabling the steel works at Newcastle and Fort Kembla to produce more steel. Shipbuilding was proceeding as quickly as could be expected in view of the need for training staff.