THE COLONIAL SUGAR REFINING CO.

Dominion, Volume 4, Issue 964, 3 November 1910, Page 4

THE COLONIAL SUGAR REFINING CO.

CHAIRMAN'S ANNUAL ADDHESS. ...At a meeting of the shareholders, held on October 27, 1910, the chairman (fcho Hon. H. E. Kater, M.L.C.) in moving the adoption of tho report on tho company's business for the half-year ended" September 30, 1910, said :— "It: will not bo necessary to-day for mo to refer in detail to anything that has happened to us during tho last six months, for the period has been very uneventful, except in the maintenance of higher prices of sugar in Europe for a longer tune than wo had thought possible. I will, therefore, pass on at once to matters of more moment, and will placo before you somo facts in connection with tho position and prospects of the company which, in the opinion of the board, should be explained to the shareholders as justifying a change that is being made in. the system of stating our profits. "And first 1 would say that in attaining tho results to which I will presently refer, two lines of policy have been notably effective, viz., tho substitution of shareholders' capital for borrowed money initiated in 1890, and tho adoption some years earlier of the chemical check over all our manufacturing processes. ■ "Tho former has told greatly to our advantago'in this way. It is necessary in every business like ours to look forward to the complete replacement of the plant after about twenty years of actual work, and if, as is so often the case, this has been purchased with monqy borrowed on debentures or otherwise, there should bo set aside yearly a sufficient' sum to pay the debentures at maturity or to provide new machinery. Now, we havo asked you from time to time to pay off all liabilities as they, fell due out of capital subscribed by tho shareholders, and, in consequence, tho largo amounts which, under other circumstances, we should have reserved to meet such payments, have been available for new ventures. 'Most of theso have given satisfactory returns, and as there has been since 1890 an almost continuous expansion of our trade, tho system has proved so successful that wo are now able to say .that our investments in Fiji have in this way been practically, paid, for out of profits, the amount required for this purpose corresponding with the earnings of our business outside Australia during the last fifteen years. In other words, wo havo been ablo over this period to let these profits accumulate and to use them in developing interests which could hardly have been taken up as a soparate speculation, though they are now of much value as a part of the groat interdependent business that has been built up for you since the expansion began. "The other factor- I alluded to just now,- the chemical check, has- been of even moro importance by diminishing tho waste in manufacture and thus adding greatly to our profits. In this direction the constant pressure applied since 1882 under very competent control has brought about marked savings, and the consequent lowering of our cost of production had aided us greatly in surmounting tlio many difficulties and tho two serious crises in tho sugar market we have had to face within that time. And thus strengthened, we. aro ready to meet competition from any quarter with untroubled niinds, because we believo that wido and long experience in this work has given us;infonnation, not generally obtainable,, which will be of the greatest assistance to us.' There is no need for me to go into details about this matter, but I can give you some idea of what has been done and still remains to be done, by telling: -you ;tliat-some-of the losses have been reduced by two-thirds, some by a half, somo. of course in a minor degree. Nevertheless, of the sugar in the cano that goes to. our mills and of that taken into the refineries wo still fail to re-, cover each year in tho shape of sugar a quantity that represents a value of' between £250;000-and £300,000 (tliero are six figures in each of- theso amounts), while we are spending on the chemical check alone about £20,000 • a year.' .'.'Hero then are tho real reasons .for the success of our company, not, as some would havo you believe, tho acquisition, of money by wrongdoing and robbery, but only by. the careful,arid laborious application over a long period of fundamental rules so ofton neglected by manufacturers. , , "It had been our intention to present a statement to' this effect'to the Royal Commission which was to be appointed to report on tho sugar. industry, , but there seems now. to be little chance that such appointment will be made, so we take this opportunity of thus explaining tho position to the many thousands of peoplowho are concerned "in bur wel; fare. The reason why wo do not expect the inquiry to take place is that sworn facts are not always appreciated at their true value, especially/when ■, accompanied by a judicial finding based on tho facts. At the same, timo it is impossible to believe that an investigation into.the conditions of the trado would bo entered upon which was not controlled by a Judge, or which had for its real object the discovery of some evidence that might be quoted to support the untrue and malicious charges made'against us. "To these attacks wo have not thought it necessary to make any reply, and I will not allude to them further to-day except to call your atteijtion to one gleam, of humour which they contained. This was the selection of sugar refining as a trado which ought to bo nationalised. Those who spoke on the matter seemed to bo wholly unaware that this was the only important manufacturing business now carried on. in Australia under Free-trade conditions. Vet refining is called a monopoly which deserves to be crushed,; though every distributor is free to drawj his supplies from Hong-Kong, Java, or l , elsewhere, and to put this sugar on tho market on terms at least as good as those we have to comply with when selling the produce of the raw sugar we import so largely for the' supply of the refineries. All-traders know that white sugars are not imported to any extent because we undersell our friends in tho ; East, and we intend to continue to do so, thus keeping our own markets for the local industry. "Now, as regards the accounts, we do not propose to make any. change in the lines referring to the fixed investments in connection with tho statements just made about those outside Australia, for as things now are there is. no necessity to do this.. Nor shall I refer to.the fluctuating balances, except to say that, as you may know, theso'assets stand at loss than cost, v/hilo there is also a provision on the other side in the shape of' suspenso accounts that can bo drawn on in case of need. The business is in some ways a risky one, aid wo desire to bo always on the safe side. "In the statement of profits you will notice that wo have separated the earnings in Fiji and New Zealand from those in the Commonwealth, and wo propose to continue this practice. It has to be said, though, that the division in question cannot bo so exact as to enable us to uso other than round figures. !Tho business, must bo worked as one, and ivohave never yet attempted to closely allocate many charges attaching to tii'c investments as a whole. ; "Ono result of the adoption ef't''s system will bo the showing of larger profits, which can bo applied to buckling up the reserve fund or for orher purposes. The change is appa-ent in tho figures hero submitted to yon, and as tho balance after payment cf the dividend now exceeds £150,000, we aro submitting to you resolutions -for the,

addition of this amount to the paidup capital in the same manner as was adopted for tho last increase in 1903. This transaction "will bring the paid-up capital to the. present limit, £3,000,000, and at ojir next meeting we shall propose the alteration of this amount in the Deed of Settlement, so that further additions may bo made if this later on seems to be desirable. . ■ ' "It will interest you to know that this increase of capital togother with the two preceding additions from profits represents a gain to the Provident Fund, through its holding of shares, of between £45,000 and £50,000. Practically all our permanent employees are members of the fund, and in view or tho satisfactory results obtained by the company during the past fivo years, their efforts are being further recognised, by a special grant similar to that madein our jubilee year."