Tasman Paper Shows Loss Of £1,750,644

Press, Volume XCV, Issue 28222, 9 March 1957, Page 10

Tasman Paper Shows Loss Of £1,750,644

(New Zealand Press Association) AUCKLAND, March 8. A net loss of £1,750,644 was incurred by the Tasman Pulp and Paper Company, Ltd., in the' year ended October 31—the company’s first year of newsprint production. The result, which compares with a net loss of £778,273 in the previous year, was struck after writing off a total of £1,671,129 for ordinary and special depreciation. The corresponding allowance in 1954-55 was £425,832.

The New Zealand Government is one of the largest shareholders in the company, having taken up more than 2,000,000 of the 5,984,755 £1 ordinary shares issued to date. In addition, the Government has made advances to the company, totalling £4,514,828 at October 31, 1955.

The latest depreciation figure comprises £1,122,666 (£164.499 in the previous year) and £548,463 special (£261,333). The value of fixed assets, less depreciation, in the latest balancesheet is shown at £16,171,698, compared with £15,673,453 in the previous year. Pulp Mill’s High Output The directors state in their report that the chemical pulp mill has now practically reached continuous operation at full rated capacity. The newsprint mill has, on a number of occasions, produced its rated daily capacity, but it is expected that some time may elapse before continuous production at rated capacity is achieved. The sawmill, which started operation in March, 1956, has demonstrated its efficiency to process timber up to its rated capacity on a cne-shift basis. In view of adverse market conditions, sawmill operation at present is being restricted to one shift until demand improves. Mill production for the year was 39,000 long tons of newsprint, 22,000 long tons of woodpulp for sale, and 10,500,000 board feet of sawn timber (in eight months’ production). Production of Newsprint In terms of rated mill capacity, newsprint production was approximately 50 per cent., and pulp

production approximately 60 per cent.

‘‘ln respect of a new mill operating in a country where the industry is in its infancy and where, with minor exceptions, all labour is new to the job, it was to be expected that it would take some time to work up to the required level of efficiency,” states the report. “In addition, operations were beset with a shortage of electric power and a number of mechanical and electrical failures.” The report adds that world prices of newsprint are rising, and under existing contracts the company’s prices are adjusted periodically. Accordingly, higher returns will accrue during the next 12 months, but offsetting such increases, the company has incurred higher rail and seafreight payments and wages costs.