LINSEED OIL PRODUCTION

Press, Volume XC, Issue 27406, 20 July 1954, Page 10

LINSEED OIL PRODUCTION

Dunedin Plant To Close ONLY FACTORY IN NEW ZEALAND The linseed oil factory of Dominion Industries, Limited, Dunedin, the only processing plant for linseed oil in New Zealand, will shortly close down. This was announced in Christchurch yesterday by a representative of the company after discussions between interested parties and Mr P. B. Marshall, secretary of the Department of Industries and Commerce.

“Those who have taken part in the dicussions include, apart from officers of the company, representatives of the paint manufacturers, oil and colour merchants, master painters, Federated Farmers, including growers, and the Department of Agriculture,” says the statement. “The growers and the paint manufacturers wished to see the industry continued, as did the oil and colour merchants and painters, but with some reservations. However, the company stated that in face of the criticisms that had been made and the inadequate return on the large capital investments it had been decided to withdraw.

“At the present time, because of different conditions ruling overseas, oil could be imported cheaper than it could be produced in New Zealand. However, it was pointed out that during the war years and for some years following, locally-produced oil was considerably cheaper. Linseed stock food had at all times been cheaper. Taken over the life of the company, the industry had not cost New Zealand one penny. “Most of those associated with the industry agreed that the company, in co-operation with the farmers, has done an excellent job in stimulating the growing of linseed and maintaining continuity of supplies during periods of shortage and, although the growers and consumers regret the decision to withdraw, they understand and accept the company’s point of view. It is not anticipated that the price of linseed oil will be reduced immediately as, with the approval of the Price Control Division of the Department of Industries and Commerce, current prices will be maintained until all existing stocks of oil for which the company is committed are disposed of.”

Manager’s Review of Industry In making the anno’ neement that the plant was to down, Mr W. G. Weight, manager of Dominion Industries, Limited, said: “We entered the industry at the request of a previous Government at a time of national emergency. Our remaining in the industry was encouraged by the present Government, but for a number of very good reasons peculiar to the situations ruling in New Zealand we see no immediate prospect of producing oil at a price comparable with overseas.

“Overseas producers are often heavily subsidised, and the market is notoriously influenced by such policies. In addition cattle-cake, which is a byproduct of the linseed industry, is in great demand overseas, and the price at which it is sold far exceeds the New Zealand price', thus permitting overseas producers to cut the prices of oils.

“We very much regret closing down this industry which we believe has served New Zealand well and which could still make considerable contribution to our economy. The trends of events are against us, and those who have been insistent upon purchasing their raw materials at the lowest prices without regard for local industry or our overseas funds will again have the opportunity of putting their theories to the test.”

The company would continue its operations only for as long as it was necessary to clear up outstanding commitments to consumers and growers. Mr Weight also said that the company thanked the Minister of Industries and Commerce, his department, and the Depax’tment of Agriculture, for the help and co-operation given during a very difficult period in the face of adverse criticism.

DECISION APPROVED When this statement was referred to him last evening, Mr C. A. G. Catto, an executive member of the New Zealand Federation of Oil, Glass, and Colour Merchants, said that the result of the criticism, which was supported by quite a number of organisations, was most satisfactory, especially as within a few months the price of linseed oil should drop, and all paints containing linseed oil should also drop in price. Painters and members of the public had already expressed pleasure at the result.

“I trust that .the Minister of Industries and Commerce (Mr J. T. Watts), remembering his repeated statements that linseed oil is of strategic importance to this country, will remove this commodity from the necessity for imgort licences, at least from the British bmmonwealth,” he said.

“The monopoly of control in this industry was established some years ago, about the end of World War IL During the last five years, had they the opportunity, merchants would have been able to buy linseed oil from British Commonwealth sources, at a lower price than the average price of the pool oil from the company which is now ceasing its activities,” said Mr Catto.