Comment On Fertiliser Industry Expansion

Press, Volume CIV, Issue 30847, 4 September 1965, Page 8

Comment On Fertiliser Industry Expansion

The problem requiring careful scrutiny and planning by the fertiliser industry is the correct timing of expansion, says the annual review of the sheep industry prepared by the Economic Service of the Meat and Wool Boards.

A survey made during the year by one of the leading authorities in New Zealand on the potential and likely requirements of fertiliser in the future indicated that by 1972 some 2m tons of superphosphate a year would be required, and to attain and maintain the ultimate potential in stock carrying capacity if this was achieved by 1980 would require more than 3m tons of superphosphate a year.

What was the fertiliser industry doing to provide increased production to meet this anticipated increased demand? The new fertiliser works in Northland was now in operation with a planned productive capacity of 140,000 tons. The possibility of a combined Wellington works was mooted, which could, when established, contribute 140.000 tons.

It was stated that every other existing works was either installing additional plant or actively planning to do so in the near future. It was announced that a contract had been let for new fertiliser works at Timaru. The establishment of a works at Te Kuiti was also being investigated. These combined plans were expected t provide a capability of output by 1968 well in advance of estimated requirements by then. Extra output in 1964-65 at 1.867.000 tons against 1.604,311 tons in 1963-64 had already enabled reserve stocks to be built up with total usage for the latest period being 1.767.000 tons.

“The problem requiring careful scrutiny and planning by the industry is the correct timing of expansion,” says the Economic Service. “Overcapitalisation on expensive ! plant too early can lead to this not being fully utilised for some years, while excessive delay in providing additional facilities or purchases of ultimately unsuitable plant could lead to bottlenecks in providing sufficient supply for a rapid attainment of the objectives outlined by the Agricultural Development Conference. “The aviation industry, too, is fully alive to the part it

will be called on to play in stepping up production. An agricultural pilot training scheme is in operation, manufacturing rights for a proven overseas topdressing plane have been acquired, representations on the matter of import licences for aircraft and spares have been made to the Minister of Customs. The aerial work industry is now a highly efficient and integrated contributor to the national economy. Well over half of the total acreage topdressed annually is treated from the air and much of this indeed is only made possible by the activities of aerial operators.”

Another factor not to be overlooked in an increased production drive was the supply and price of raw material. Supplies of raw materials (rock phosphate and sulphur) were adequate for the foreseeable future but like most commodities were subject to increasing charges. A recent new rock phosphate agreement entered into by the Australian Government on behalf of the Phosphate Commissioners would result in a slightly higher landed cost, which might not be absorbed in the industry and could lead to a slight advance in superphosphate prices.