RATIONALISATION

Evening Post, Issue 25, 30 January 1935, Page 14

RATIONALISATION

TIMBER INDUSTRY

SCHEME ON THE COAST

A scheme for the complete rationalisation of the timber industry on the West Coast has been agreed to by practically all millers. It is hoped that as a result of the sciieme nil millers will receive a fair share of the trade which is now showing such encouraging signs of revivnl. .Details of the plan were completed at • the conference of millers and merchants 1 held last week on the West Coast, reports the "Press." There the delegates showed general agreement with the claim that ' rationalisation- was the surest method ;of keeping control over the internal admin-, istration of the industry and of preventing any of those checks to development which had occurred in the past under haphazard production and marketing. This rationalisation scheme is thought to be unique in the Dominion. On broad lines it has been in force for' a short period, and already, it is claimed, has shown itself successful, and aa important factor in maintaining the present favourable trade conditions with red pine for the Australian market. It is stated that there are now only a few mills on the West Coast which are not concerned in the scheme and that their owners are npt likely for long to remain in the position of securing all the benefits derived from the rationalisation scheme without themselves contributing anything towards it, ORDERS DISTRIBUTED. All the mills in the organisation have been placed on something of a quota basis, all orders being distributed equitably from a central controlling office between mills according to their producing ability. Since it is most important to the industry that the export output of red pine be maintained at a high level, steps have been taken, as part of this scheme to see that mills cut timber for export. This is done by a system of subsidies. Mills which are less favourably situated than others for the export trade—those working at a great distance from the exporting centre, Greymouth—are subsidised to assist them to meet the heavier railage in■volved. , ' Another important feature of the scheme ■ for the rationalisation, of this industry is the equalisation of returns to the millers. 'Naturallly prices vary as between ,the North Island, the East Coast, and the Australian markets, and there are certain mills which are particularly suited ,to supply some particular market. .So a Bcheme has been evolved whereby the return to each mill is the same, no matter what market is beint' supplied. by that mill. This is achieved by. the creation of a fund to subsidise mills which supply timber to the low-priced markets. This ensures that they are not penalised for concentrating their production on the less profitable'market. Here again .the ar-, rangement is of very great importance: >n -the development, of the market,/with, Atis- ;: tralia. An instance can be givep'to. illus--1 trate the working of the scheme: iii;equalis- > ing both railage''costs and returns.:,; A > mill, more than 20 miles from Greymouth ■{jand supplying to' the Australian market, assistance to.-the extent pi 3d a i'hundred superficial feet on railage, and, Is frv hundred (superficial feet to equalise the ; price and bring it to the level! which ■ P.frould have Been received had the.timber?>b'een gent to a more profitable ■'"market. :Tt can thus be seen that the. scheme is, ;-'fairly complete; in detail; '''■>.'-V':-,;x-':\ ;.-,. ;J SPREADING PRODUCTIId^' |e

The scheme has apparent advantages which will probably be appreciated in other indnstries where there is no such ' control. By a system of the pooling of orders it is assured that the smaller miller ' gots his share of the work offering. The bigger mill transfers surplus orders to the ■smaller man, and so an even flow of pro-1 . v duction spread over the entire industry Is maintained. Output is easily assessed and easily handled; marketing is 'infinitely simplified, cut-throat competition disappears, and for those in the organisation,- particularly the small.' man, there are few of the uncertainties which made sawmilling formerly such a haphazard and risky business. The timber merchants co-operate in the scheme by handing a certain proportion of their | orders to the central office, so > enabling the rationing of orders to certain mills. Under'the rationalisation* scheme there is no interference with the actual inter-1 nal administration of-each mill. Millers handled the details associated with cutting and production themselves, and there. is no interference with,- individual enter- j prise or extension 'of activities. Even where, under the scheme, a large mill becomes the foster-parent to one of the smaller concerns and hands on its surplus' orders, the, small man'conducts own milling work without any dictation from' the big man. 'Tho result seems to have been rather an- increase of individual initiative in the industry, and already there1 are signs' of .expansion and development among the smaller mills which would have been unbelievable a few years ago when the timber .trade was in the doldrums. CONTINUOUS EMPLOYMENT. The scheme has been 'practically perfected attd is now assuring the West Coast sawmillers, it' is claimed, a stabilised price, a fair share of output and, so long as markets hold, continuity of employment for every mill.-in, the organisation. To a great extent price-cutting has actually been done'away with. Those closely associated with the administration of the scheme say that it is only this co-opera-tion within the industry which has made possible such a marked revival in the internal trade and in the export trade with Australia. The favourable marketing arrangements made with the Australian importers could never have been arrived at but for the good will shown by'the mill- " ore and merchants in organising themseles along such lines. Nor, ■ they say, would it have been possible without this co-operation for the'industry to say, as it did at the recent conference, that the red pine trade has been so organised that this year it will be quite possible for the West Coast to meet the heavy demand expected for rimn from the Commonwealth. The industry has adopted "Australia" as its watchword, and is displaying an optimism which is reflected all over the Coast.