ESTABLISHING A NEW INDUSTRY.

Horowhenua Chronicle, 20 December 1932, Page 7

ESTABLISHING A NEW INDUSTRY.

V‘_ ■ • Factory to be Located in Levin. .Potentialities of Fibre Treating Process. Providing a fair .measure of support can be obtained in Levin .there is every prospect of a factory for the treatment of flax fibre -by a new process being established here early in the New Year. -Particulars of the enterprise were placed before a well-attended .meeting under the auspices of the Chamber of Commerce in the Whakatane Club on Friday night by two of the promoters, Mr B. -Sproule and vMr R. H. Bellow, of Wellington. They made very definite maims for their process and produced a number of samples of the product resulting from it. These were very convincing and were .examined with a great deal of interest. The prospectus has “been issued and it specifically names Levin as the site of ,the factory. Mr Sproule stated that, in tthe event of anything occurring to prevent that, local subscribers would have the option of receiving their money back. The company is to be one of £20,000 capital, but it can commence operations when £5500 is subscribed. Already it is understood, over half the amount required has been taken up. The proposal is well worthy of investigation by local residents who desire to see a new industry established at Levin, with the prospect of receiving an ample return for their investment.

".The President of the Levin Chamber *of Commerce, Mr N. M. Thomson, pre- - sided, and in opening the proceedings, -Mr Thomson said the purpose of the meeting was to hear from the Company’s own experts exactly what kind !of products it was intended to turn tout. The advantages accruing were twofold in that a new industry would ■he created and, the town and district in which we lived would be benefitted. -It was the function of the Chamber •of Commerce to help and encourage • any activity which had as its objects the development of any industry in Levin and which would create further employment or benefit the flax industry which occupied so large a part of this district. The Chamber, however, •could not express any opinion upon the investment value of any enterprise - —that was for. the public to form their -own opinions upon. It might be thought that anjy such enterprise was pre-•-doomed to failure in view of the financial stringency at present existing. He did not take that view. Provided that an undertaking was established on. sound foundations and was wisely managed, there was no reason why it -■should not succeed. The' enterprise before them seemed to have been started on rock bottom and if it could obtain a footing in bad times it was certain of success when better times come, -as -they assuredly • would.

"WILL RELIEVE UNEMPLOYMENT

Mr Sproule thanked the President :and the Chamber of Commerce for the opportunity of addressing a meeting of local citizens. The economic condi--.tion was one of the reasons that had led to the decision to go ahead at the present time with the flotation of the company. The times were bad, but why were they bad. Lord Bledisloe recently said that one of the country’s troubles was that too much money went out of it. We had not enough secondary industries to keep the money in the Dominion. The promoters thought that, if tliey started now and made a success of. it, the effect would be to induce other companies to start aud :go creat additional industries. He wanted to make the definite statement at the outset that Fibre , Manufacturers (N.Z.), Ltd. was not connected with any other flax company or con- ■ eern dealing in flax. The inventor of 4he process was Mr Harold Wright, ’ who had assigned the whole of his patents to the company.

If they were successful in floating the company the factory would

be established in Levin. '< He made that statement very emphatically because a person investing .money-did so for two reasons —because he would thereby help his own town or country; or would be helping him--aelf by getting dividends therefrom. A THREE-FOLD. BENEFIT. The figures given in the prospectus had been worked out both by factory .and financial experts, and on these there was no doubt about the financial isuecess of the undertaking. That wou!4 ■be a direct benefit to those taking up shares. It was further claimed that .about one-third of the unemployed in the district would be absorbed by the erection of the factory •.and its effects. Benefit would accrue in a third direction and that was the saving to the consumer of the Company’s products. The first of these -was engineers ’ waste replacing the imported cotton waste. \ , TECHNICAL TESTS. Tests carried out by the Government .Analyst, Mr W. Donovan, M.Sc., and ;a consulting analyst, Mr A. B. Ald•xidge, showed conclusively that the Company’s .product had a definitely .greater absorption valuer than cotton uwaate. The Dominion Analyst proved rthat the former was 40 per cent, niore "absorbent, than cotton waste at £75 per ‘ton. ■ Th© waste prepared from tow • could be gold at £4O per ton and show A profit of £ls per ton. Another line •that would be . manufactured was a (Substitute for flock and kapoc. It would, be: surprising to his hearers to T1?©; toldr that £300,000 went out of Australia and'New Zealand annually for these products. If they could keep that money in New Zealand they were (•certainly going to do some good. Mr "Sproule said an . important point was that no matter what grade of' tow or fibre was used theprocass turned out an identical

quality or product. Fibre that was

rejected for export could be used, and a great deal of fibre that was now wasted could bo used. PRACTICAL TESTS.

Tn additions to the scientists who had reported so favourably practical tests had already been made of the engineers’ waste by the New South Wales Railways and Public Works Department and they found the product excellent and were only waiting until it was commercially produced to place orders. Applications had been received already from Australia agencies. The waste had been tried out by engineering companies in Wellington, in coal mines and on boats and from all of these places there were enquiries as to when they were going to start manufacturing.

PLAX-WOOL. Another line that would be turned out was flax-wool, a substitute for flock, which was used for mattresses, etc. This now consisted chiefly of old rags, often highly insanitary. The new process turned hemp into a hygienic, resilient and warm commodity that was ■ideal for the purposes for which- flock was now used.

At present African sisal was imported for incorporation in plasterboard. •The Company’s product would take the place of this as it had the essential qualities of strength and stainlessness. Mr Sproule exhibited samples of board and said some had been made two years ago and still showed po sign of stain.

A substitute for kapoc could be made and sold at a profit at £45 per ton as against £l2O a ton for the kapoc Roofing felt and other lines could also be manufactured. CONTRACTS WAITING.

In the early stages the Company would confine its attention to waste, flock and kapoc as the factory would have to cope with the business they could see offering. They could get contracts straightaway to absorb the whole output for the next three or four years. One of these referred to the flax-wool, which, he explained, contained five-sixths of flax and one-sixth of wool crutehings. The process was simple and quick and enabled lines to be turned out at a profit at a price that was nowhere near that of competitive articles. That the industry had been secured for Levin, continued Mr Sproule, is largely due to the generosity of on© of your citizens, Mr F. G. Eoe, who has very kindly donated a section of land for the factoryTHE CAPITAL REQUIRED. It was intended to float a company with capital of £20,000, of which £14,350 was open for public subscription. It would depend to a large extent upon the support given by the residents of Levin as to what the outcome would he. The prospectus was issued on November 22, and they had till February 20th to get enough capital to go to allotment. They wanted £5500 shares subscribed for by that date. They had received no fewer than four oqers from other towns which wanted the factory and only this week had had an offer of the capital required if the project was closed as far as Levin was s concerned and the factory erected in another centre. Their reply was “No.” Levin was definitely mentioned in the prospectus as the site for the factory and they had received so much encouragement locally from the Mayor and Councillors that the matter must go on. If they did not get the money .by February 20th, their operations would automatically cease and other arrangements be made. If the necessary support was forthcoming the erection of the factory would, be proceeded with immediately. They did not want anything like £5500 from Levin, as already a great many shares had been taken up, but they did want the citizens of Levin to show some practical interest in the project and give it some measure of support.

Mr Sproule said he wanted to make the definite statement that, if the factory was not located in Levin, th© local subscribers would have their money returned, if they desired it. BETTER ARTICLE AT LOWER PRICE.

The interim secretary, Mr E. H. Dellow, said that, frankly, he was very

sceptical at first about the advantages claimed for the Wright process, but after closely investigating it he became thoroughly convinced that these were not exaggerated. It was a chemical process so that what results were obtained in the laboratory would also be obtained in an industrial plant. He was satisfied that, gWen time to get upon a good operating basis, this process would show investors remarkably good returns. The Department of Industries

and Commerce was 100 peer cent, in favour of the enterprise because it was going to use up what was now largely a waste product, and also because, as an industry, it would stand on its own bottom without ,the need of a protective tariff.

It was a secondary industry in the true sense of the word in that it would use the by-product of a primary industry. The plant could, be installed and operated successfully commercially with the minimum capital of £5500, but the shareholders would have to be satisfied’ with a limited output and expansion would' be necessary to cope with the business offering. It was an industry that was going to circulate a certain amount of money in the town and was going to find a market for a primary product that at present had very little prospects. The benefits did not stop at the employment in the factory, The greatest benefit would come outside the factory.

The President the speakers for their lucid explanation, of the project and invited questions. A number of enquiries were made and great interest was shown in the samples of the various products on exhibition. Mr Bellow said the figures given in the prospectus were all on a very conservative Thus tow was quoted at £ls per ton, but they could buy fibre to-day at that price, and tow at £8 per ton. Labour costs were also estimated on the high side.