CLOSING OF FACTORY

Manawatu Standard, Volume LVII, Issue 200, 24 July 1937, Page 11

CLOSING OF FACTORY

SPIRITED DISCUSSION. AVHAKARONGO CO.’S SHAREHOLDERS. If the recommendation of the directors of the AVliakaronga Co-operative Dairy Co., Ltd., approved at last evening’s annual meeting of shareholders, survives the necessary 'processes of confirmation at subsequent meetings, the factory is to close down permanently and the company will be liquidated. The meeting last night lasted over lour hours, and the adoption of the report and balance-sheet —usually a “machinery'” matter—occupied over three hours. Mr J. F. Roniley, chairman of directors, presided over a large attendance, and matters proceeded smoothly until the stage for adopting the report and .balance-sheet had been reached. After briefly' reviewing the history’ of the company and its activities during the past year, the chairman moved the adoption of the report and balancesheet. and this was duly seconded. He invited a discussion and t-lie invitation was readily accepted. Mr T. ltanford took exception to a paragraph- in the report which stated: “The falling off in make has been due to loss of supply, and as it seems that there would be a further decline in supply during the ensuing season, with no prospect of a recovery in the future, the board of directors recommends that the factory closes down permanently as soon as possible after the annual meeting, and that steps be taken to liquidate the company.” “Just what is this recommendation based on?” Mr Hanford asked. “It was recommended before and the suppliers turned it down,” lie declared. The chairman said the reason for the recommendation was sound. It had become. very’ obvious to the directors months ago that the company could not go on with the decreasing supply', and they had suggested closing down to a special meeting of shareholders. That meeting, however, had been divided and had decided, he admitted, to carry on and make a canvass of the dairy farmers for supply. There had been the two factious and each side appointed canvassers, who worked for one day. Difficulties arose, but the canvass was completed. Only 149 tons had been promised and a second canvass later secured a promise of 153 tons, “No factory can operate on 150 tons.” declared Mr Romlcv, “and so the directors are doing only right in reiterating the recommendation.”

Mr J. E. Hodgson: We did not get one refusal the first day. The chairman went into the details of the canvass. Mr Hanford: The shareholders decided by 72 votes to 42 to carry on. Tf this report and balance-sheet are pushed through the direction of the shareholders will be ignored. Mr Ranford moved as an amendment that the report (with the deletion of that portion relating to closing down) and the balance-sheet be adopted. This was seconded by Mr Hodgson. The chairman: Before I put the amendment I would ask all who will supply the company to stand up. Mr Ranford raised a point of order and objected to the request. Mr j. F. Lynch suggested that a discussion on the motion and amendment should be allowed to proceed. “Figures speak louder than words,” he said. He compared the company’s balance-sheet with the balance-sheets of other companies. He was not one who wanted to see the AVhakarongo factory close, but it was a question of pounds, shillings and pence after all, he added.

Mr W. E. Byers : Air Ranford seemed to be .convinced once; now he has changed over. Mr Ranford (to the chairman): 1 don’t think you would support that. The chairman: Perhaps Air Byers meant that you should be convinced. (Laughter.) Air Hodgson said that the question of tonnage was being laboured too much. Costs could be brought down in keeping with the tonnage, and he argued that due regard had not been given to costs. Mr Ranford mentioned improvements that could be effected to make a model dairy factory and at the same time keep down costs. The chairman : And where is the money for all these improvements to come from?

There ivas further discussion regarding tonnage, costs of production and improvements to plant. There was also some comment on the capability and practical knowledge of the Dairy Commission, the chairman stating that he had every confidence in the members of the Commission. “They were not far out in their report abou; our factory, after all,” he added. The chairman again called upon those who would supply the factory to stand up, and Mr Ranford again vigorously protested. “I move that the amendment be now put.” he declared. but the chairman declined, to act, stating that he wanted to know what supnly would he offering. Mr Hodgson urged that they should not cloud the issue by talking of tonnage. -IT The discussion started again, Mr Ranford sounding a warning note against the policy of closing small factories. That policy had been tried in America, he said, and production costs hail risen instead of falling. He admitted that in Whakarongo the building and equipment had not been kept up° to standard, but the cost of improvement would not be as great as had been made out. “If we go out as a company,” ho added, “we, as suppliers, must join another company, take up shares and pay our share ol that company’s expenses.” He appealed for hesitancy as against rushing into a decision to close. There was much more discussion which was mainly reiteration, and finally amid a good deal of protest the chairman asked thoso who were leaving the factory to stand up. Sixteen suppliers responded. The amendment was at length put to the meeting by ballot on the basis of shares held, and the voting was even, 71 all, the chairman giving Ins casting vote against the amendment. When the motion was put a show of hands was objected to and a ballot was again taken, resulting in the motion to adopt the repoyt and balance-sheet in its original form being carried by 72 votes to 09.

ELECTION OF DIRECTORS. When it came to the election of directors (there being five nominations lor the throe vacancies), the three new candidates intimated “it is too late now.” However, their proposers would not agree to their withdrawal, and a ballot took place, resulting in the election of tiic.so throe. The voting was: L A. Newoombe 111, J. E. Hodgson' 90, F. AV. Eagle 90, E. Rout 57. W. E. Byers 50. The first three were declared elected, and in returning thanks said their return was something of a buck-handed compliment. ' 'We offered our services ” said Mr Hodgson, “to boost our factory, and it seems tlinlT we have been put in to wind it up.” A voice: AVe haven’t closed yet. It was resolved to fnvour supplying the Awahuii factory, and the secretary was instructed to take the nocossary *st'?ns in this direction. Another voice: Don’t be too smart; we haven't finished yet.

The chairman and directors were voted the same honorarium for the coming year, only on a month-to-rnonth basis.

Air A. T. Bcritlall was reappointed auditor at the same remuneration as last year. The meeting closed with a vote of thanks to Air Romley, who, at a meeting of directors later, was re-elected chairman. COAIPANY’S OPERATIONS. In its 24th annual report and possibly its last as an active manufacturing concern the company stated that the advances made, together with surpluses to the credit of butter and casein accounts, represent a total of 14.543 d per lb of butterfnt from milk and 12.997 d per lb of butterfnt from 'cream. “Considering the small supply received during the season, the year’s working must be regarded as satisfactory. Tlio quantity, of butter made during the eleven months amounted to 1793 tons, against 204 tons during the season 1935-36, a decline of approximately 10 per cent.,” it added. “in respect of the previous year (1935-36), the estimated season average pay-out per pound for butterfat (all grades) to milk suppliers and to cream suppliers quoted in the report for that year was 13.17 d and 11.96 d respectively, and those payments were actually made. It is not proposed to pay a dividend on share capital. From the attached statistics it will be noted that the average advance to milk and cream suppliers on account of butter has been 11.519 d, and to milk suppliers, I. on account of casein, making a total advance of 13.007 d to milk suppliers. There remains to the credit of the butter account tlio sum of £2053 12s 2d, being equal to 1,478 d per lb on all butterfat received. The credit balance to the casein account amounts to £461 16s 6d, being equal to ,358 d per lb on butterfat received in milk. It is recommended that a bonus of Id per lb of butterfat on account of butter and Jd per lb of butterfat on account of casein be paid out as soon 4s possible after the annual meeting, and that the balance then remaining to the credit of butter and casein accounts be distributed as soon as circumstances permit.” Statistics, with comparisons with the previous season in parentheses, are as follow: —Pay-out for previous year per lb butterfat (season average), milk suppliers, 13.17 d; cream suppliers, 11. ; pay-out for current year per ill butterfat. milk suppliers, advance, 13.007 d; milk suppliers, estimated surplus, 1.836 d; cream suppliers, advance, 11.519 d; cream suppliers, estimated surplus, 1.478 d. Number of suppliers, 50 (55) ; pounds of milk received, 6,844,154. (7,793,055) ; pounds of cream rceeiv ed, 61,650' (63,107) ; pounds of butterfat from milk, 309,207 (354,117) ; pounds of butterfat from cream, 24,204 (26,186) : average butterfat test of milk, 4.52 (4.54) ; average butterfat test of cream, 39.25 (38.45) : total charges, including repairs and depreciation, up to fro.h., at per pound butterfat, 2.334 d (2.405 d). Buttermaking.—-Total lb butterfat used for creamery buttennaking, 333,411 (380,303) ; pounds creamery butter made, 402,634 (457,737); over-run creamery butter made, .2076 (.2036) ; average grade of butter, 93.74 (93.90) : cream grade percentages, finest, 99.70 (99.74); first, .14 (.26) ; second, .16 Casein. —Pounds of butterfnt in milk used for casein, 309,207 (354,11/) ; estimated value of casein at per lb of butterfat, 2.22 d (1.55(1).