MANUFACTURING COSTS

Northern Advocate, 14 August 1933, Page 3

MANUFACTURING COSTS

FACTORY FIGURES COMPARED. EXPERIENCE IN THE NORTH. j Air. Archibald took up some time at the Kaitaia Dairy Company’s annual meeting of suppliers in presenting figures in which manufacturing and other costs at Kaitaia were compared with those for other factories. The chairman said the chief cost was on the manufacturing side, and ATr. Archibald had not taken into consideration, in giving lump sums, the difference in the number of suppliers to the factories mentioned, nor whether a district was compact or scattered. With regard to fuel the Whangarei factory was in a very favoured position in that the waste from joinery and timber works was dumped without charge at the furnace doors for fuel, whereas at Kaitaia £2 per coni had to be paid for wood. Comparisons without the full facts could be very misleading.

The Manager: “The only way to get •at the costs is to take them from farm gate to f.o.b. ” Comparing Kaitaia with Ruawai for 1932-33 it was found that Kaitaia had an output of 1718 tons from 603 suppliers, while Euawai’s output "was 1332 tons from only 259 suppliers. Euawai was a consolidated district, and cream cartage costs wore very low. Kaitaia’s costs from farm gate to f.o.b. w r ere 1.567 pence, against 1.418 pence for Euawai. At the latter factory there w r as a large general store where the' 1 suppliers could get all they wanted, and on goods purchased the company was able to rebate 71 per cent back to the suppliers. Costs had gone down at Kaitaia every year—£looo last year and £BOO the previous year. Referring to repairs and maintenance costs the manager said that four years ago practically the whole of the plant had been condemned by the Government, resulting in heavy renewal costs, and this year they could be making 2000 tons of butter at a factory originally equipped for 1000 tons. lie vras very proud of the figures showing costs. The costs were ; |d per lb lower than at Hokianga. Mr. Bird said many factories had a trading department which was used to bring down costs. Eo Kaitaia, directors had endeavoured to get the factory on a footing that would permit of comparison with Euawai, which had a turnover in its trading department of about £40,000. This year the profits from the trading department were being rebated direct to the purchasers, but- previously the profits were used in keeping down general costs. Mr. Holden said the Hikurangi factory was much shorter than the Kaitaia factory, and he had been informed that, with some addition to the plant, the manager could deal with a turnover of 4000 tons. A voice: “How wide is the factory?’’ (Laughter).