JOLL DAIRY COMPANY.

Hawera Star, Volume XLVIII, 28 August 1924, Page 3

JOLL DAIRY COMPANY.

ANNUAL MEETING. The sixteenth annual meeting of the T. L. Joll Co-operative Dairy Co., Ltd., was held in the Kapuni Hall yesterday, when the chairman, Mr J. J). Murdoch, presided over an attendance of about 120 shareholders. CHAIRMAN'S ADDRESS.

The chairman, in moving the adoption of the annual report and balancesheet (already published), said he was pleased to see such, a large attendance. It showed that the shareholders were tubing a keen interest in the affairs ot the company. No doubt when things not as good as in past years everv shareholder wanted to know the reason why.

The past season had been a rather tricky one. The season had started i .' v 7 t £ rou gh weather, was then followed by good weather and a rather long spell of dry weather in the autumn. In connection with the manuracture of cheese, it seemed impossible ,ror the manager to get the same vield m the dry weather as he did when the weather was warm and showery. This was found to be the case everywhere, but it was a matter over which they had no control. The only way in which it could be overcome was bv growing green feed for the stock. Numerous experiments had been made with a. view to determining which were the most suitable fodders, but he was sure that if a number of the tenures on the land were longer better results would be obtained. The short leaseholder could not do any good, and he believed that the time would come when the industry would become better established by better tenures. Land values had been high, but they were decreasing, a fact which was in favour of the man on the land. This season seemed to be starting off fairly well, but he thought suppliers would he wise to see that they had plenty of feed in the autumn.

Continuing, the chairman said that the past season had been one of the worst in the history'' of the industry as far as the ups and downs of prices were concerned. One of the factors which materially affected the position was the irregular shipping— not the irregular time of departure, but the irregular quantities arriving on the Home market. Of course the quantity shipped each month should not always be the same; it should correspond with the demand on the market, but when they found that almost a quarter of the season’s produce had arrived during one month (February) it was plain that there was something wrong. However, it was in the hands of those controlling the industry to see that that was put right. They now had the Control Board, and that body could approach the shipping companies and make contracts that were more binding.

Proceeding, the chairman said that the industry had grown to such an extent that they had to make more detailed investigation into matters affecting the industry than in the past. ■With this end in view a federation of dairy companies had been formed in South Taranaki. One of the principal objectives of the federation was to establish somewhere adjacent a laboratory for* carrying out scientific research. At the present time dairy companies employed their casuals, who worked their way up until they became branch managers.- There was no place where these men could study the scientific side of the industry under proper conditions, and one wondered how they had done as well as they had. However, it was apparent that if they had a laboratory where instruction could be given their position would be improved. Possibly they in South Taranaki had been the first to take up a stand, and they had approached the Agricultural department with a proposition to have a laboratory established in Hawera. in the meantime. They did not propose establishing a costly laboratory as,far as apparatus was concerned; the principal charge would be the salary of a .scientist. He did not know whether there was a suitable man in New Zealand, hut they were making investigations. Instruction would he given to anyone who cared to attend the laboratory, even although he did not intend to become an employee in one of the. factories. One matter that was worth investigating was the difference in the yield of cheese per lh butter-fat in various districts. There was a variation of as much as 3d per lh but-ter-fat, and when it was considered that Id on Taranaki’s output meant £BO,OOO it could be seen that it was a serious matter. »

The chairman next dealt with the growth of the dairying industry in New Zealand. Last season the production had amounted to 130,000 tons ol dairy produce, which was made up of 70.000 tons of cheese and 60,000 tons of butter. Only about 5000 tons of butter was not shipped to the I;nited Kingdom. A great many countries were competing on the English market in the sale of butter. With cheese there was not the same amount of competition, the fortunate part for the New Zealand producer being that cheese required the whole milk being carted to the factory, and producers in some of these other countries were not in the i>osition to do this. Coming to the JolJ Company’s working during the past season, the chairman said that during the month of February, when the huge quantities of produce were landing in the Old Country. the directors decided to hold in London rather than sell. The Jol) Co. was' not the only company to make this decision, but the ‘unfortunate part was that they had no knowledge of the manner in which it was being held. Stores in New Zealand were equipped with cold air circulation, but it appears that there was nothing of this kind in the stores that were provided ior the cheese by the agents at Home. It was a known fact that unless the air in a cheese store was being constantly changed the cheese liecame heated and deteriorated. At the beginning of May the directors were informed that the hot weather was coming on and the cheese was deteriorating. It was absolutely necessary to realise on a certain quantity, and* this the directors decided to do. Unfortunately the firm realised on more than the directors anticipated. Referring again to the storing of the cheese, the chairman said that thcdirectors expected that their cheese would he kept in proper stores. Tt was incumbent on an agent to take all care with i he produce that was sent Home on proper consignment, and he believed they had a claim against tiie firm acting a? agent. The cheese thus lield had realised practically 5s a cwt less than it would have realised had it been sold on the English, market as it arrived. The price realised was S‘2s 6d tfhen the normal price was S7s fid, equal tft .€6OOO. or over .Id per Ih hift-ter-fat to the shareholders. .Toll’s had held cheese dining the two previous years, arid the results had been very satisfactory, and if the produce had been held in proper cool air storage this Inst year the company would have come out all right, although he did not say that they would have got the price they were sticking out for. The matter of cool storage was one which the J Control Board could investigate. They

could find out whether it was better to store produce in England or in~New Zealand. There was a feeling in the industry that it was better to hold produce in New Zealand than in England. The produce would be fresh and would go straight off the boat on to the market. However, the storing of the cheese had occurred, and what"liad occurred could not now be undone. Lhe amount of cheese unsold was 1.2,000 crates, and this had been taken into the balance-sheet at 755. So far it was selling from 92s to 975. and if similar prices were realised for the balance the final pay-out would be about Is 5.1 d. AVhile they would like the pay-out to be higher, they could not o\ erlook the fact that it compared favourably with those companies "ho had not held. Just how this was he could not quite understand. Nevertheless. the position at present looked very different from what‘it did at the end of the company’s financial year. Proceeding, tne chairman said that the financial position of the company was better this year than ever it had been. They would notice that improvements had been made at two of the branch factories, and other factories had been written down. There was an increase in the machinery account. but this was due to the increased supply of milk to the factories. The debt of the companv to the bank now Stood at £9OOO. and they had stocks in hand which might be deemed liquid assets amounting to £IO,OOO. There were very few companies as well off financially. Manufacturing charges amounted to 3.71 d per lb butter-fat. Last year they were 3.51. which showed that they were better off this year than last. They had managed’ to bring carrying costs down to Ss 2d per ton. Also they would notice that the old Bacon Co. debt had been cleared off. Of course, witli a greater quantity of milk handled, wages, fuel, packages, etc., showed an increase. Air S. Grindley said he had come to to the 1 meeting ieeling a little dissatisfied with the way in which the bal-ance-sheet had been presented. He felt it was not as clear as it usually was. There were a few rumours about that affected the prestige of the company. They were as follow: That the number ot crates of cheese stated in the bal-* ance-sheet as unsold was incorrect, in that some bad been sold before the balance-sheet had been drawn up, that the money voted to the Bacon Co. had not been paid; that bulk store and garage accounts, etc., bad not been separately shown as previously; that the amount of £250 to the Hennet Co. showed on the liabilities side as £250 and on the assets side as £150; that boxes and crates had shown an increase of £456.

The chairman, in reply, said that the balance-sheet was absolutely correct with regard to every crate of cheese manufactured. Figures as to what was sold and what was not could be seen at the secretary’s office. With regain! to the Bacon Co. money, the shares which doll’s had held in that concern had been wiped off, and the Whole of the money paid. The bulk store had returned a net profit of £lO9, and the garage showed a profit of £79. The Rennet Co. figures were explained by the fact that the difference between the two suras named by Mr Grinley had been placed in the working account and so would not crop up again. The increased cost of boxes and -crates was due solely to the increased supply ol milk, and also to the fact that the previous season the company made more butter and the fact of crates beg more costly than butter boxes accounted for some of tlie increase. In ireplv to Mr Kiley, the chairman mid he considered that the firm act’ng as the company’s agent was responsible for the bad storing in London. although it must be remembered that if the company had not given instructions to store there would have been no trouble at all. The firm had advised not to hold, but the- company’s iast experience had been that agents could make . mistakes just as otheirs could. Mi G. Hurley said that with the knowledge that the agent firm had uade such a mistake was it not a fact that- four of the directors had voted in favour ,of their getting tlio output for this vear?

The chairman replied that he could inly reply to questions concerning the company’s actions, not action*-, of, the individual.

Mr Hetts: Did the firm make a mistake? The chairman; Yes;, they made a mistake in holding our cheese the' way they did. Mr Treweek asked that Lhe four directors make an explanation. The chairman said they had found no fault in the past. As far as merchants handling produce on open consignment were concerned, they could not find better.

A shareholder asked if it were not- a act that some produce had been sold forward, by the agent? The secretary replied that only one shipment had been sold forward, and that had been to their advantage. The price realised had been' 95s and 965. but in the meantime the company had instructed their agent to hold. Only about 846 crates were sold, and the balance was held. Had the forward sale pot been made that price would not have been realised for that particular shipment.

Mr E. Scott referred to a shipment sold forward the previous year, and on which the comnanf lost £3600. The Agent had said it was the usual thing to sell forward, but lie had been infetmed by other agents that it was not the correct thing to do. The chairman said that the agent sold forward when lie thought lit. The chairman mentioned that lie did not think the directors would ever again agree to have cheese stored in London. If there were any storing to lie done it would be done here in New Zealand. A shareholder asked if the directors acre under any obligation to consign through their iast year’s agents.

The chairman; Absolutely none. Mr. Scott said it looked as if they were tied to the agents in question. The chai rinan : Not one of the directors is hound in any way to the agents, and if anyone has told you that* it is a falsehood.

Some of the directors then explained at length what had transpired at the disposal meeting Mr. Chapamn said that, a.s it had turned out, the holding of the cheese had not been beneficial to the suppliers, and from the discussion it appeared that there was some fault on the part of the agents who had been handling their produce for over twelve years. It appeared to him that those agents had worked up a clieucy. and they 5 had a regular demand for Maori Chief cheese. Even if they changed their agency that clieney would he kept Going. Their last year’s, agents would watch the market and buy the Maori Chief cheese when flip opportunity ottered, and in turning it over would collect a ‘-piling commission. It seemed (o him, then, that the rornnany would be keening two agents instead of one. In reply |o Mr. Grindlev the chairman said he was afraid that the company would not have a claim on the insurance company.

Mr. Br-hwpifprs said that if iho parly shipmonts that worn stored wore worth 83s, then thoso that worp put in storo hater should have* boon worth more. It seemed to him that 16.000 rrnfps were a good many to dump on the fun fleet at ofice.

The chairman said he admitted that the newer cheese could not have been in the same condition, hut then it must be remembered that new cheese going into a store, where the atmosphere held the heat of the older cheese, would deteriorate very quickly. In reply to a further question the chairman said that the first intimation that the storage was not all that it might be was received in a cable, which said that the temperature of the store was 40 to 45 degrees—suitable for cold weather, but not for warm weather. The report and balance-sheet were then adopted. The election resulted in the retiring directors—Messrs J. AV. Paterson, D. P. E. Alalone, and W. Slattery—being returned. The voting was as follows : J. TV. Paterson 675. D. P. F Alalone 646, TV. Slattery 639, H. J. Eaves 568. and E. Chapman 432. H. A. Lennon was re-elected auditor. Directors’ fees were fixed at the same as last year, namely, a guinea per day plus travelling expenses. Air. Scott spoke against the system which allowed block voting. A man who was elected on a block vote did not know whether. he had the confidence of the shareholders. The chairman said they were governed by the Companies Act. & Air. S. Grindley said that from what he had read of the federation he had decided that he was against it. They could have a laboratory without a feder. ation. The federation would probably mean the appointment of a secretarv at , a salary of about £IOOO, as had been done in connection with the Control Board. He thought that eventually the federation would grow until it would be instrumental in having laws passed restricting them to such an extent that a supplier would he forced to supply one company and no other. It was restricting liberty. Air. Grindley said lie would like to move that the Joll Company support the proposal for the establishment of a laboratory, but express itself as antagonistic towards a federation of dairy companies.

The chairman said it was not a question of joining in with the federation for bringing compulsion to beau* on the suppliers. There was jno obligation on the part of the company in joining the federation All they were responsible for was the two guinea subscription. At the present time there was no constitution as a. federation. It was simply a matter of ascertaining the feeling of the companies on certain matters, and any company could withdraw its membership* when it chose. Air. Grindley mbved, and Air. Betts seconded, that it be a recommendation to the directors to keep out of a federation of factories. The motion was loat.

The chairman mentioned the proposal of the Dairy Division to raise the. points for first grade butter and cheese, from S 8 points to 90, and he stated that dairy company directors would meet officers of the Dairy Division at Hawera. on Monday in connection with the matter. He considered that if given effect to> the proposal would not assist cheese manufacturers. Tn the early part of tj?e season a lot of the cheese was below 90 points. Another thing a lot- of cheese graded second grade in New Zealand became first- grade when it arrived Home, and vice versa. Firms used to deduct 2/4 per cwt from cheese branded second grade. However, Wairarapa. dairymen were also taking the matter up, and he. did not think that the resolution passed at the- annual meeting of the N.D.A. would be given effect to.

Air. Cox thought that the company should pay interest on the amount of invested capital, not on the amount of the fully paid up shares. In reply to Air. Harrison, the chairman said they were watching carefully the Eltliam Conlpanv’s experiment in regard to. the installation of a cool airing system for cheese. If the saving in shrinkage warranted it they would consider making a move in the same direction.

A supplier took exception to the company going outside for a branch manager. The chairman replied that the coifipany believed in promoting their own men as far as possible. In the case mentioned, the man had previously served four or five years witli the company. In reply to a- further question, the chairman said that the dismissal’of a certain branch manager . had been quite warranted.

In reply to Air. Harrison, the chairman said that the output this year hud been disposed of on open consignment—the cheese through three agents and the. butter through one. Air. York asked if the 17 per cent of second grade cheese at- Palmer Road was due to negligence or anv other cause.

The chairman said that officers from the Dairy Division had been trying to locate the cause of the slifnv milk, but with not much success. No one knew what slimy milk was, but that was where a. laboratory would come in useful. The chairman also read a report from the inspector of sheds and milking machines, that officer urginothe ‘necessity for the installation of boilers on every farm. The hot water irom the factory was not suitable bv the time it arrived on the farm. In reply to Air. Harrison, the chairman said it was impossible to separato the working costs of each branch altogether, although the diretors had ci statement at each meeting which indicated the results ol the workinc ol each branch.

Air. Harrison also said that it bad fiecn reported that timber could bo obtained Irom .Sweden at such a price li’H would allow of the supply of boxes at (id each less. The cliair'•‘T’i'od that lie bad hoc., in touch with the representative of the 11 n . 1, a,,<l tlu ' timber proved suitable and an order of the size wanted could be placed, the timber would be purchased. So far they had not been able to get what they wanted. Q Ai/°t e v ot appreciation was’ accorded the ladies who had provided" lunch and the meeting closed with a vote of thanks to the chair.