The Canterbury Frozen Meat And Dairy Produce Export Company, Limited

Press, Volume XCV, Issue 28179, 18 January 1957, Page 16

The Canterbury Frozen Meat And Dairy Produce Export Company, Limited

CHAIRMAN’S STATEMENT

The Seventy-fifth Annual General Meeting of The Canterbury Frozen Meat and Dairy Produce Export Comnany Limited, will be held at Christchurch on Thursday, 14th February.

The following is the circulated statement of the Chairman, Mr John Deans:—

We are now adopting the practice becoming common overseas and to some extent in New Zealand of issuing the Chairman’s Statement with the Notice of the Meeting. This will give all shareholders an opportunity of studying it before attending the meet-

The Annual Balance date has been changed to October 31. This is a more convenient date than November 30 because with the tendency to earlier opening of the Works the retention of the later date would mean the inclusion in the accounts of any year some part of the next season’s operations. The new date to some extent also simplifies the preparation of the consolidated accounts of the Company and its subsidiaries which are required by the provisions of the Companies Act 1955. The accounts are now in the form required by this Act. and as expected, their preparation has taken longer than previously. Together with the longer notice of meeting now required this has resulted in a later date for the Annual Meeting.

Accounts Because of the alteration to the balance date the accounts submitted this year cover eleven months instead of the usual 12: this means that they include rather less than a full year’s working expenses. Moreover, the profit shown is increased by the sale of heavy stocks of meat unsold at last balance date and by the realisation of a greater proportion of this year’s meat stocks than usual; consequently this year’s results cannot be regarded as normal.

In addition to the Balance Sheet of The Canterbury Frozen Meat and Dairy Produce Export Company. Ltd., a Consolidated Balance Sheet combining the accounts of the parent company and the subsidiaries is included. This will enable shareholders to study the accounts of the group as a whole. The Profit and Loss Account also shows the results of the operations of the group as well as the profit earned by the parent Company. The Net Profit of the parent Company is £218.039. The amount required for the Dividend recommended by the Directors is £42,091, and of the remainder. £52.313 has been placed to the Buildings and Plant Reserve and £IOO.OOO to the Contingency Reserve. After these appropriations and the provision for dividend a balance of £90.064 is carried forward compared with the amount brought in from last year of £66.429.

Profits of the Subsidiary 'Companies have been included in the profits of the parent Company only to the extent of. a dividend received from one Subsidiary.

’ The premium arising from the issue of the 15.000 Ordinary Shares last year is shown in a new account called the Share Premium Account.

For all practical purposes, the Current Liabilities shown under the heading of “Trade Creditors and Provision for Taxation, etc.”, takes the place of the item shown in the past under “Drafts against Company’s Interest in Shipments. Creditors, etc.”, except that provision for taxation is now included. In the past the taxation was provided for out of the Bank account before the close of the financial year.

The value of fixed assets shown under “Freezing Works. Land. Buildings and Plant” has increased by £117,000 before writing off depreciation. Of this amount some £25,000 has been spent at Belfast on Beef Chillers and on an experimental Freezing Room. £52,000 has been spent at Fairfield on the extensions now being carried out there, and £38.000 at Pareora on Freezing Room alterations. Fellmongery, and a Mechanical Cbnveyor from the Boning Room to the Dry Rendering Plant. These are the major items of expenditure and in addition there have been small items for employees’ houses, hay barns and so on.

Under the heading Current Assets, the item “Stock at Works, Value of Interest in Consign-! ments Unrealised, etc.”, is lower than last year, due to reduction in the stocks on hand this year as compared with the position at: last balance date.

The inclusion of the tax figure in Current Liabilities, the reduction in our Unsold Stocks of meat and the amount received as new capital have contributed towards the conversion of a bank overdraft at November, 1955. into a credit as at October 31 last. The Year’s Trading

At the close of last year’s accounts we had heavy stocks of meat unsold due to delays in shipping and it was not until March of this year that we had sold all the previous season’s meat. During 1956 the shipping position improved considerably with consequently better arrivals of our meat in the United Kingdom. As well as selling the balance of the old season’s, we have disposed of a f.ar greater proportion of our current season’s meat than was the case at this time last year. As stated above, this is reflected in the accounts. We have sold meat to many markets outside the United Kingdom. Just on 12 per cent, of our exports of Lamb. Mutton and Beef have been sold to Canada. Germany, Holland. Greece, Egypt, Italy and Russia. Of Beef alone, it is interesting to note that nearly 40 per cent, of our exports were sold to countries outside Great Britain.

We have killed over 50 per cent, more cattle this year than last and have processed several shipments of Chilled Beef, of which we have had good reports. The Beef Chillers at Belfast can handle 250 head for chilling in any one shipment. So far these shipments have been more or less experimental and we are now working out the cost of processing chilled beef as compared with frozen.

We have always been apprehensive of the effect of large supplies of Argentine Beef on the U.K. market —firstly, as affecting the selling price of N.Z. beef, frozen and chilled, and secondly, as affecting the selling price and

consumption of our lamb and mutton. This is of concern to us all. Another point to keep in our minds is that approximately 61 per cent, of the meat consumed in the United Kingdom is produced there.

Good clearances have been made of all our other products —pelts, wool, casings, edible offals and tallow. The prices of these were very good in 1956 but it appears that they may not be maintained at such a level this year. Operations At The Works The number of stock killed at our three Works in the 1955-56 season was the greatest experienced. Opening early in November, 1955, we were very soon running at capacity —at Belfast and Fairfield from the second week in November, and at Pareora from the first week in January to the third week in April. This pressure to kill in November and December at the two former Works was caused by the continued dry weather resulting in steady pressure until the latter part of the season. It is unusual to have this condition so early, and it was only by extensive overtime on the part of all the men at the works that we were able to cope with the rush; credit must be given to them for the way in which they worked without interruption. While a great deal of last season’s pressure was due to weather conditions, we must realise that the production in Canterbury is increasing both in lambs and in cattle. In midCanterbury alone there is a great increase in the past few years as a result of irrigation, and this will continue as new irrigation schemes are completed. To enable us to handle this increase, we decided in April last to enlarge our Fairfield Works and a start has been made with this work.

A few comments on these Works may well be made here. Fairfield Works opened for killing in March of the year 1899 and to the end of that season killed 167,458 sheep and lambs. Numbers increased during the next four years to 369.997 in the year 1903. Between 1903 and 1956 the killings at Fairfield have fluctuated up and down, the lowest point being 155.414 in 1918. Last season the killing was 542,700 sheep and lambs. The daily capacity at Fairfield last season was 4200, which has been increased this season to 5000. The work now being done will result in a further eventual capacity of 10,500 daily and the immediate objective is 7000 with-, in two years. A new fellmongery and alterations to the present Fairfield pelt house should enable us to kill 6000 daily next season (1957-1958)—after which the new slaughterhouse to be built will be completed, giving us accommodation for three chains each of 3500 daily capacity. The work involved is very large. Not only have we to build a new slaughterhouse but we have to expand every department including engine room, accommodation for the men, storage, fellmongery, and so on. The present storage capacity of the Fairfield works is 370,000 running carcases—a three storied cold store at present in the course of erection will hold about another 105,000 carcases. This, is a big job—for instance, the total floor space will be over 18,200 square feet —the insulation will require over 80,000 square feet of 2 inch cork board and there will be over five miles of ammonia piping for refrigeration.

The cost of the extensions will be very heavy and cannot be closely stated. However, by the time they are finished, we may easily have spent close to £500,000. The new capital will of course be of great assistance towards meeting this cost.

Last month we decided that we should also increase the capacity at Pareora by the installation of a third chain and so increase the daily capacity to 10,500 from 7000. Applications to the Minister of Agriculture and to the New Zealand Meat Producers’ Board for their authority for this increase have already been made. The main work at Pareora will be put in hand when we have completed Fairfield, and although it will involve quite a large sum, it shopld be well below the expense at Fairfield. During the next twelve months, we hope to do some of the preliminary work in anticipation of embarking on the major part of the scheme a little later. Some figures regarding the past season’s killing operations will be of interest:—

The average weight of lambs over our three works was 31.981 b compared with 34.441 b in the previous season.

The opening schedule price for lambs Twos up to 281 b was 25d and for Twos 29/361b 24d. The average price per head for the season was 59s 7d compared with 65s 8d for the previous year. The total payment to producers for stock killed was in the vicinity of £5,000,000. District Fat Lamb Competition The lambs from the Mid-Can-terbury Competition held at Fairfield on December 1, 1955, won the Award in London in the South Island Exhibit there on March 28, 1956. This is the second success of the Mid-Canterbury entry, the previous one being on April 27, 1954. Competitions from Mid-Canter-bury were held at Fairfield on November 22 last, from South Canterbury at Pareora on November 29 and from North Canterbury at Belfast on November 30. The Belfast entry was the largest we have experienced, comprising 225 pens totalling 675 lambs. The lambs entered in all these Competitions were of excellent quality. Open Door Policy During the past season many clients again availed themselves of our services in shipping lambs to London on “own account” and entrusting us with the realisation of their meat, wool and pelts. I would repeat what I said at the last Meeting of Shareholders, that if any farmer wishes to take the risk of the market we will be

glad to handle his lambs and to sell them through our London Subsidiary. The “Open Door” has always been available to farmers through our works —a point which once more I bring to the notice of our clients.

Our facilities, selling organisation and markets are at least equal to those of any other firm in the meat industry in New Zealand and the advantage to be gained from the high reputation i enjoyed by products when sold under the C.F.M. brand is available to our clients who sell through us. Staff The satisfactory result of the past season’s operations could not have been achieved without the efficient and willing services of our whole staff. I am glad to have this opportunity of acknowledging our indebtedness to them all. Alteration In Name Of Company An Extraordinary General Meeting will be held immediately following the Annual General Meeting at which a proposal to alter the name of the Company to The Canterbury Frozen Meat Company Limited will be submitted. This is a shortened and more convenient title and discards- that portion of the name of the Company which is not applicable to its activities. New Articles Of Association At the same Extraordinary General Meeting new Articles of Association in line with present day requirements will be submitted for your approval.

The Statement of Accounts is printed on page 15. (Published by Arrangement)