NORMANBY DAIRY COMPANY.

Hawera & Normanby Star, Volume LVI, Issue LVI, 11 June 1909, Page 6

NORMANBY DAIRY COMPANY.

THE CHANGE TO CHEESE

MEETING OF SHAREHOLDERS.

On May 19 an extraordinary general meeting of members of the Normanby Co-operative Dairy Factory Co., Ltd., decided to instal cheese plants at Norniariby, Ararata and Hirstlands, and it was left to the directors to make the necessary arrangements. Another ' general meeting was held in the Town Hall on Wednesday to discuss the financial aspect. Mr W. Goodland, Chairman of Directors, presided, and there were about 30 members in attendance. The Chairman said the directors had gone into the question of finance. Naturally the directors first approached -the bank, but the enquiries there were not at all satisfactory. The bank wanted all securities the company had at present— as a matter of fact the bank had got .them. Almost everything the company had wa^mortgaged to the bank. The bank wished the company^ to increase its sh^re capital ,io £6000. At present the position, was this: the hank Held promissory notes the face value of which was £2000. The plant and land of the company was worth £1440; there was uncalled capital— those who had not paid up their shares in full— £739 j promissory notes given by Hirstlands suppliers, £600; shares that must be allotted on /account oi this season's Tautter-fat, £314, carrying • additional p.n.'s for £314; a security of £5407.' Assuming the extra capital could be raised by increasing the £1 shares to 30s, that would- give another ** £1000, which would carry the £1000 in promissory notes; buildings and plant would cost £1000. The company would have in round figures a total -ot ±,84uu, all good security. But on the top or that the bank said they would require ' a "joint and several" guarantee. The directors were not in favor of a joint and several" because (1) the security was ample without it, and (2) the directors knew that if they asked for it the shareholders would negative it. (Hear, hear.) In addition to interviewing the bank the directors had also approached outside firms doing business in dairy produce, and up to the present _no satisfactory replies had been received. The regies so far had been m the negative. "The shareholders were practically in the same position as at the last meeting. Recently Mr Turton (Secretary) had enquired from various - factories the smallest number of cows necessary /to make the installation of cheese plants pay, and Joll's said that less than 650 cows would cot pay ; Kau- ' pokonui put it at 700 cows. The Chairman said" he had taken the average of the supply of five suppliers. This worked out that 'each cow gav,e 2091bs yf butter-fat. Ararata supplied this season 32 tons of b\itter-fat, equalling 71,800 lbs ; but on the 650 cows basis it would mean that Ararata would have to ncrease its supply of butter-fat to 130,0001b5. Was Ararata in a position to guarantee that amount? The only thing for Ararata to do would be fo/ the suppliers \o consent to sepiia J -n accounts being kept; that was that al'. expenses incurred by that brancn Mould be charged to it and all profits ««-alised would be credited to Ararata. Hirstlands was considerably belo.v Ararata. This season 19 tons of buttcfat were supplied to Hirstlands, an I :\!- lowing for the two months in spring before the factory was opened, it would 'be eoual to 25 tons of butter-fat. He did not think that the .installation of . a cheese plant at Hirstlands ■ would pay. It had been said that if Hicstlands did not get a cheese factory they would "quit." Before the Hirstlands suppliers • decided* to sever from the company he' assured them that they would have to shoulder their liabilities to the company very shortly after tiny had gone. !He did not throw that out as a threat. As regarded^ the installation of a cheese plant at Normanby he did not think it couldTje done unless Hirstlands were, willing to, come over to Normanby. But that was not the only difficulty." The great difficulty lay in the fact that there was no room in the present main factory to allow of a cheese plant being installed there. There was a risk of fire in having the buildings too close together. The only thing to do would be to get an outside site for a cheese factory. Mr Tarrant asked if suppliers would not give the "joint and several" guarantee to the bank, How was it proposed to raise the money? _ '•■ The Chairman proceeded to ; again . explain on the lines already indicated by him, when Mr Tarrant said: Never mind what's on paper. He wanted to know how they were to get the necessary money. Thp Chairman replied that the bank would have to advance the money without a "joint "and several" or advance ■one at all. / A silence for a couple of minutes or more followed, when the Chairman said he did not want all the shareholders to soeak at once. Mr A. Bissett asked: If every penny piece was mortgaged what had the company to show for it? The Chairman: A bank overdraft of £1200. (Laughter.) That is all we have at present. (Renewed laughter.) Mr C. E. Gibson said he supposed tome of the. overdraft would be wiped off before"-the next balance-sheet was ' issued. The Chairman: I would /not be surprised "to find that it has increased a bit. (Laughter.) He would like to see it reduced somewhat. Referring to the question before the meeting, he said it was one that required very great consideration. * Unless they increased their £1 shares to 30s, it was no use sitting there that afternoon- talking about cheese plants — unless, of course, members were prepared to 1 find the Tnnnpv themselves.

Mr Tarraut supported the Chairman's views that a cheese plant could he installed at Ararata. He -was quite willing that separate accounts be keot for Ararata if a cheese plant were installed there.

Th° Chairmnn explained that the el-rectors ormlcl make no suec;estion to the nipetinff: they cofikl only put the financial position fairly before the s'lju'elT^dorv I^aro the final solution of the difficulty to the meeting. ?»fr Gane: As an individual yon are in favor of cheese? The Chairman : Personally, I am. > r r Le Fl^T»%ia: a^^Ptl what would be the cost of installing the cheese phnt.°. The Chairman replied that the cost

for two of the factories would be something like £2000. Replying to another query, the Chairman &a: "i/ess the company could £et some other site for the proposed cheese factory at Normanby he would be no party to putting the factory near the present butter factory. It would really be cheaper to buy a site and put the cheese factory on it independent of the present one altogether. air Gane also explained the difficulties in the way of putting the cheese factory at Normanby on the present site. It would be dangerous to have it near the cottage in case of fire.

air J. Cocker said he was quite agreeable to Ararata having separate accounts. But what he was mostly concerned about was the financial aspect of the matter. Ho understood from the Chairman that the directors were not sure of the financial position yet.

The Chairman: That is so.

Mr Cocker thought that if one bank would not advance money without a "joint and several," it was fairly good reason that other banks would reject the suggestions from the company. The Chairman: If they do, that's an end of it. He explained that the directors had not exhausted their source of enquiry. j A desultory discussion followed, and to bring matters to a head Mr Gibson moved: "In/ view of the financial- difficulty which stood in the way of cheese plants being installed, that the company continue in the manufacture of butter." Mr Kelsen seconded. Mr Gane supported having dual plants, because the company would then be in a position to make either butter or cheese, according to the state of the market. \ Mr Mcßae asked if it was decided to continue making butter whether that would not prevent Ararata from going in for a cheese factory. The Chairman said if Ararata wished to paddle their own canoe he could not stop them. He was quite agreeable, that Ararata should keep separate accounts. Mr Bell said if they could get the noce'sary finance they should go in for cheese plants. , f Mr Le Fleming spoke of the advantages in companies having dual plants, but thought it would not pay to have cheese plants un'ess the company had a sood supply. The Chairman opined tjiat Normanby would have a good supply provided Hirstlands came in. Their present difficulty was that of finance. air Riddle believed that even .if Hirstlands did not come across there

would oe a good enough supply at Normanby.

Mr Gibson's motion (that the corn-

pany continue making butter) was then put to the meeting, the voting being: For 15, against 15. The Chairman gave his casting vote against the resolution. . Mr Gibson then called for a ballot, which resulted : Butter 782, cheese 1366.

(Each shareholder voted according to the number of shares held.)

The Chairman remarked , that the

position was very much the: same as it was before. The company had decided to go in for cheese, and he presumed that the directors would have to continue their investigation as regarded financing the project. Mr Cocker moved: "That the directors he empowered to increase the shares by 100 per cent on a butter-fat basis for the purpose of getting the financial

assistance for installing cheese plants at Ararata and Normanby. air W. Gane seconded the motion, which was carried, only one voter dissenting.

On -the motion of Mr F. J. Gane,

seconded by Mr Mcßae, it was decided that the arrangement of details he left in the hands of the directors.