ZONING CREAM SUPPLIES

King Country Chronicle, Volume XXXI, Issue 4945, 21 January 1937, Page 4

ZONING CREAM SUPPLIES

PLANS FOR CENTRAL KING COUNTRY. EXECUTIVE COMMISSION MOVES. The problem of zoning cream supplies in the Central King' Country district, which embraces the Ohura, Kaitieke and Taumarunui counties, with the object of promoting greater economy and efficiency in both the collection of cream and its manufacture has been engaging the attention of the Executive Commission of Agriculture and of those prominently interested in the industry in the districts concerned for some time past. There is a possibility that a definite scheme for reorganisation and rationalisation will be decided upon within the next few days. During the past dairy suppliers of the district have had three choices for the manufacture of their dairy produce. The district, because of its former lack of roading facilities, is essentially a home separation area, and three companies were operating over the district, the Kaitieke Co-op. Dairy Company, which had its factory at Piriaka, the Ohura Valley Dairy Company, with its factory at Matiere, and -the Waikato Valley Dairy Company, Ltd., which has its factory at Hamilton. The cream was collected by lorries and carted direct to either of the co-operative dairy factories or to the nearest railway station, whence it was railed to one of the three factories. Under the present system cream was being railed past the nearest factory, the Ohura factory being perhaps the greatest sufferer in this respect. As the outcome of the investigation of the Executive Commission special meetings of shareholders of the Ohura Valley and Kaitieke Co-op. Dairy Companies were held last Saturday to give effect to the proposed measures of reorganisation. Purchase Provided For. The proposal, it is understood, provides for buying the interests of the Waikato Valley Dairy Company in the district -by taking over its supply, which is estimated at about 400 tons of butter, and paying that company £5 a ton. The two co-operative companies will go into liquidation and will form a new company. The two factories at-Piriaka and Matiere will be retained and each will manufacture the cream collected in its own area. The position is explained in a circular forwarded to all-shareholders and suppliers of the Ohura Valley Dairy Company by the directors of that company. The circular states that on December 2 the Commission called a meeting of the directors of the two co-operative dairy companies, when a statement was made that the Commission was now prepared to create a Central King Country zone to tcke in all cream supplies within the boundaries of the Taumarunui Hospital Board district, and that tentative arrangements had been entered into between the Commission and the Waikato Valley Dairy Co., Ltd., for the cessation of that company's activities in the district. Before completing such arrangements, however, the Commission, with a view to protecting the interests of all suppliers, desired the rationalisation of the dairying industry within the proposed zone. Reorganisation Desired.

It was stated that the Commission was of opinion, and strongly recommended, the reorganisation of the existing companies with a view to promotion of greater economy and efficiency in respect to both collection of cream and manufacture thereof. The reorganisation suggested by the Commission was: —(a) That both existing companies should go into liquidation and that a new company should be formed to take over buildings and plant (but not book debts, etc., and not liabilities, of existing companies); (b) that existing factories at Piriaka and Matiere should continue to operate (the question of the advisability of establishing a central factory was considered to be premature and was reserved for future consideration); (c) that district representation should be preserved by wards committees and directors elected under the ward system. This scheme for reorganisation and rationalisation of the industry, was strongly recommended by the Executive Commission of Agriculture and approved by representatives of the Dairy Board who were also present. The scheme was also approved by the directors on a majority vote, with the added proviso "that for a period of five years no steps be taken to concentrate manufacture under one roof until the project has received the endorsement of the suppliers, and that the question of the location of such central factory should be determined by independent advisers appointed by the dairy division and the Executive Commission of Agriculture." The circular added that should shareholders fail to carry the necessary resolution the Executive Commission had stated that it was not prepared to give each company a separate zone within the main zone, but that suppliers now sending to the Waikato Valley would have the right of choice between the two companies, and would be bound by such choice for a period of three years. Both the Commission and the directors considered that such alternative would be most unsatisfactory and uneconomic.