WELLINGTON WOOLLEN COMPANY

Dominion, Volume 17, Issue 288, 22 August 1923, Page 10

WELLINGTON WOOLLEN COMPANY

SOUND FINANCIAL POSITION CONDITIONS REVIEWED AT ANNUAL MEETING The annual meeting of shareholders of the Wellington Woollen Company was held yesterday in the Chamber of Commerce. The chairman of directors (Mr. W. H. P. Barber) presided. Moving the adoption of the report and balance-sheet, the chairman referred, to the surprise of many shareholders who were close observers of commercial affairs to the sound financial position of the company. He said that woollen manufacturers here, where the standard of quality was high, were between two fires —heavily advanced prices for wool on the one side, and the demand by the trade for cheaper goods on the other. When the local producer could not reduce prices so much as was necessary, to gain the business offering, the position was generally met bv the importation of a lower grade article. The company had no desire to lower the high standard of its goods, and purchasers should remember that the article that cost less was not always the cheapest. Instructive Figures. “The magnitude of the importations of apparel and textiles into New Zealand,” he said, “cannot be fully realised by those who advocate the extension of exports of primary products as being the only remedy for bad times; a limitation of imports at the same time would keep the country’s finances .in better shape. Unless some financial pressure occurs to check the .inward flow-, it looks as if the total will soon reach the amount of that period .iu & t prior to the disastrous slump of which so many wholesale houses (especially soft goods firms) hold vivid memories. In 1922, a year when the imports were looked on as large, the value of overseas apparel and ready-made clothing brought in was £1,367,709; of hosiery. £641,589; and of woollen piece gods, £825,886, making a total or £2,835,184'. Now, for the first six months of this year the total under the same heads is £2,156,290. being only £678,894 less than for the full preceding year. Such figures are instructive. and should, give much food for thought. Australia is also feeling the position. An added difficulty in meeting overseas competition, such as these figures indicate, was the. fact that last season’s wool, the price of which was high in New Zealand, did not get into consumption abroad, in time to allow of its coming back here in manufactured state, whilst we commenced using new wool at high cost, as soon as it could be obtained, the goods going on the market at once. Next season’s imported woollens should show a substantial increase in cost on that account alone. Big Increase in Wool Prices. “Never in the history of the company has it been seen that wool doubled in price from one season to the other. On December, 1921, rates Mi- half bred, we paid last wool season an advance of 100 per cent., and comparing all qualities for the two years, the average increase was 75 per cent. Such disturbing variation in raw material makes for a good deal of misunderstanding with buyers, who, perhaps, are nos in a nosition to follow causes closely. Another unusual circumstance of the year was that at seme sales in New Zealand wool was auctioned at quite 3d. a lb. higher than London parity. Prices here are governed usually by London rates. However, as tne Dominion mills grow larger and certain wools remain in short supply, as seems likely, this condition will be more frequent, and the resultant position mil'st be provided for. Australia has already been drawn on by New Zealand mills for fine wools', which it is a pity could not tie avoided. For some litrle time past there has been undoubted > financial stringency in England.. the textile trades there finding it difficult to keep mills running full time, which, perhaps, accounts to a large extent for the volume of low-priced goods coming forward, and for the large import figures I have quoted. It does not follow that the ultimate consumer always benefits, but we have to meet the goods in competition, where price is sometimes the only factor. . • • Seme recent landed nrices are so low as to suggest that dumping must be taking place. ... It is often not possible to quote firni prices for any but short periods, without taking undue speculative risks, and which the buyers do not themselves care to take. The Future. “As to the immediate future of raw material, it may be accented as obvious that fine wools will be again in great demaud. Everything Limits to that, with crossbreds rising in sympathy. The New Zealand tear Book states that there were fewer sheep in the Dominion in 1922 than in any year since 1907. The returns for 1923 will be disappointing, as heavy losses have occurred in the South Island this winter. Tho country is always prosperous when wool is high in price, so that we are glad' to see it. even if we are placed at a disadvantage " ,1 ?'? r ’ seas buyers. . . . The method for maintaining our position, and to meet all competition is, of epurse. to increase output. The demand is there, and by giving a high-class article, always" keeping up the quality, and lowering the cost of production, by increased overturn, and with the fastgrowing population of the Dominion we liope to be able to give to shareholders a fair return in dividends. . The trading of the near fu-

ture will have to be done on unusually fine-cut prices, so that to meet that increased output is essential.” The motion was seconded by Dr. O. P. Knight and carried unanimously. Dr. C. P. Knight and Mr. J. F. Dyer were re-elected directors. Messrs. Henry Kember and Son and Ernest W. Hunt were reappointed auditors.