COMMERCIAL “N.Z. Refrigerating in very strong position ”

Press, Volume CXI, Issue 32540, 25 February 1971, Page 14

COMMERCIAL “N.Z. Refrigerating in very strong position ”

The New Zealand Refrigerating Company, Ltd, is in a particularly sound financial position, the vice-chairman (Mr W. G. V. Fernie) told shareholders at the annual meeting yesterday.

“In the last four years shareholders’ funds had increased by over s2m, and the huge capital expenditure programme which had been followed by the company had equipped it, in every way, to meet the challenging years ahead,” Mr Femie said. Five freezing works had been up-dated in the last four

years, at a capital cost of over $5.5m, and a similar sum was spent to meet new and higher standards of hygiene. Over the last 10 years, capital expenditure almost equalled the total of depreciation, retained profits and term borrowings.

Chairman’s address

In his address to the meeting the chairman (Mr C. S. Peate) referred mainly to the buying and processing aspects of the company’s activities because a large proportion of meat purchases have yet to be sold and he said “My crystal ball is not accurate enough to predict the company’s profit for the year.” Mutton and lamb killings at the five plants up to February 13 approximated the same total as a year ago—a decline in mutton of 120,000 head was offset by an increase of 121,000 in lamb. Both the Department of Agriculture estimate and the company’s research indicate that the final season’s kill in both ewes and lambs will show a decrease on 1969-70. Frustrating delays in ship discharge at United Kingdom ports, particularly London, had made for a farcical situation at times, when there was more meat in ships in port than ashore and available for sale. Faster discharge Progress is being made in designing a system whereby greater tonnages are to be diverted from London to Southampton, Avonmouth and Liverpool where discharge facilities are more reliable, ling, Mr Peate said. One factor contributing to increased costs at point of di: charge is the presence of so many small separate consignments, all of which have to be sorted.

“We would support and in fact advocate any move to raise the minimum for small

parcels—at present 250 carcases—to, say, 1000 carcases. It may be claimed that this penalises the shipper of small owners’ account parcels, but such an owner has the alternative of shipping under pool or nominated vessel systems where sorting is not necessary,” Mr Peate said.

“It is too early to give any real indication on the likely out-tum of our meat from this season’s production because so little has been realised. In the United Kingdom the first few thousand lambs have realised satisfactory prices in direct contrast to the previous year. We now understand that the proposed levy on lamb to apply from April 1, 1971, has been deferred but, we presume, not abandoned," Mr Peate said. Lamb promotion In co-operation with the N.Z. Meat Producers’ Board and the Government the company is supporting lamb promotions in Italy, and in Greece and Cyprus it is selling regularly in spite of strong competition from South America.

“Although prices obtained for sales of this season’s light-weight lambs in these markets have shown a loss, they are justified to avoid the 2Jc penalty if we do not meet the diversification target imposed by the Meat Producers Board,” Mr Peate said.

During the latter half of 1970 lamb marketing in North America through Devco proved very difficult and sales volume fell because there was a general recession with increased unemployment and a tightening up of credit, and competition from the much cheaper Australian summer lamb and low priced chicken and pork. “Prospects for 1971 appear much more encouraging, there being a substantial increase in sales volume. Intensified promotion campaigns are planned for selected areas to take advantage of this renewed interest in lamb,” Mr Peate said.