Should Northland Have Fertiliser Works? Dargaville Opinion

Northern Advocate, 27 March 1937, Page 6

Should Northland Have Fertiliser Works? Dargaville Opinion

CLAIM that Mr E. G. Appleton, chairman of the Northern Wairoa Co-op. Dairy Company had no mandate to speak on behalf of the suppliers -of the company in regard to the proposed building of fertiliser works at Whangarei, was made by Mr Percy Hill, addressing a meeting of about 50 suppliers in the Empire Theatre, Dargayille, on Thursday.

The meeting was called by Mr Hill, and the object was. t;o. form a ; committee to give evidence before the committee of the Bureau of Industry, which will consider an application for a license to proceed with the erection of the works. The committee will sit at Dargaville on April 2. , Mr Hill maintained that at the first meeting of dairy company directors to consider the proposition, a resolution was carried instructing the committee then appointed to place before the suppliers of all the companies at the earnest possible moment,* all the information that was available. .This, he said, had not been dene. 7; '

i AH Could Giva Evidence.

“The chairman of our dairy company is chairman of the fertiliser company,” Mr Hill said, “and he had no mandate to speak on behalf of the suppliers. There has not been a hint from the suppliers to the directors of the company that we wanted the works. Individually -you are all entitled to give evidence in regard to the matter, but it seems to me that no individual could do much good alone, and that’is why I have called this meeting. “I presume that Mr Appleton is in favour of the works,” Mr Hill added, ahd he read the resolutions passed at tlie meeting of dairy company directors held some time ago in Whangarei, ' He said that these resolutions comprised .the only information in regard to the works proposal which had been made public. These resolutions set out that the company was to be formed and works erected on a site on the Whangarei harbour.

duced 100,000 tons , annually, and the ‘works, had recently been enlarged, the Prosser Company produced 50,000 tons and was not working full capacity and the Farmers’ Fertiliser Company 40,000 tons.

Is . There The Demand.

the total' amount of phosphates manufactured in New Zealand was 320.000 tons per annum, and the works in existence had a' capacity of making nearly 500,000 tons. The Auckland companies made last year 170,000 tons, and 30.000 of this went to Taranaki. In establishing works in Northland, they would have to compete against efficient units. At the present time there were no authorative figures available of the amount -of superphosphate used north of Helensville, except for the manufactures’ figures, and the companies said that less than 13,000 tons were sent north of Helensville. To bear these figures out, the Northern Wairoa dairy company put through less than •2000 tons of super last year, with 900 suppliers. At the railway station at Tangowahine, less than 1000 tons of superphosphate were handled. “I want you to see,” said Mr Hill, “that when they talk of 30,000 tons of superphosphate being used In North Auckland, / the figures are grossly exaggerated.

The capital of the company was to be £225,000, and £105,000 was to be subscribed by the dairy companies over a period of five years. The rest was to be raised by debentures. ■ ‘r / ■ V: ■ ‘ ■ • •, ' ■ Should Have Consulted Suppliers. “I maintain, and honestly believe,” Mr Hill said, “.that the people Mr Appleton should have consulted o were his own suppliers. That is the spirit of co-operation. They would have nothing to fear if their cause was right, Sfhd if they , had anything to conceal, then their cause was wrong. “The suppliers should have been taken into the directors’ confidence at the earliest possible moment. It is absurd of Mr Appleton to say that he lias no information to place before the suppliers, when he must have sufficient to place before the committee of the Bureau of Industries to warrant the granting of a license for the works.”

“The main case against the possibility of these works being wanted is the fact that farmers have no difficulty in getting fertiliser. , The existing units can make it all, and the price is one that the Government considers to be fair. The price in New Zealand is still the cheapest in the world.” Voices: No, definitely no. Flate Rate Proposal. Mr Hill dealt with the case for the works, and he said that the company proposed to fix a flat rate at the different Centres. As far as he could ascertain, there would be a podling of freights, and that would effect a saving of 3/- a ton at Dargaville, compared with the price from Auckland. It was generally considered that superphosphate could be manufactured by a plant working at full capacity, and with no break-downs, at a cost of between £3 5/- and £3 7/6 a ton, and, ‘plus the reduction in freight, there would be a saving of 10/- to 15/- a ton to users of the proposed company’s fertiliser. This was providing the plant worked to full capacity. His information was that.no unit could work economically unless it was producing 30,000 tons. In the North there was a market for 14,000 tons. Mr Hill said that the difference in the Challenge Company’s production figure of £3 7/6 and selling price of £3 16/- was brought about by marketing costs. A lot of money was spent on advertising, and he maintained that the Northern company would have to establish an advertising unit to compete. Another point had to be considered, and that was that farmers could not be forced to buy from the company. “I wouldn’t for one,” Mr Hill said. “The Challenge company is my best friend.” Proposed By Shrewd Men. “This Northern company was proposed by some very shrewd men, including Mr James Fletcher.* Why did he do it? For our benefit? He is a very smart gentleman, and he was the one who instigated the Ravensbourne company at Dunedin. He is a director of that company, and I say good luck to him with the money he has made. But why not propose a public company as he did in Dunedin- He knew that the only chance he had in the North was to appeal to the dairy companies and try and trap them into the scheme.”

In regard to'the raising of the dairy companies’ share of the capital, Mr Hill said that the method o|! collection was . to be by stopping sd; per lb of butterfat for the next five years. In the fifth resolution carried at the first meeting of directors, it was stated that the committee was to place information before the suppliers at the earliest possible moment. That meeting was held four'months ago, but nothing had been done. Value of Collective Evidence. “I say that Mr Appleton has not even consulted his fellow directors,” Mr Hill claimed, “yet apparently he will be giving evidence, and who will he represent? I asked several direc tors of the Northern Wairoa Company about the works. Mr Taylor said that he had not made up his mind, and Mi: Trounspn said he was against the proposal.” Mr Hill referred to the value of giving evidence collectively, and pointed out what he considered to be a danger of the possibility of the Bureau of Industry granting a license for the building of the works. % 1 If permission was granted, a meeting would be called by Mr Appleton, and addressed by able speakers, and the sanction of the bureau would be used as a lever to pbtain the suppliers’ sanction too. The people most interested would not have given an opinion as to whether they wanted the works or not. Mr Hill said that in New Zealand today there were eight units manufacturing fertilisers, the invested capital being £1,250,000, and the number of employees 700 or 800. In the Auckland Province were three of these eight works. The Challenge Company pro-.

Mr Hill said that he had always held that they should keep their dairy factory clear of all but the manufacture of butter. To manage a concern such as a feriliser company, they had to have business -men at the head. Co-opera-tive concerns in New Zealand had always failed when they had had farmers in control.

Mr Hill said he wanted those present to consider also, the fact that in his investigations, he had ascertained that the Government had, in the last i2 months, been considering a new scheme for the distribution of fertilisers. The present units would be used for the making of fertilisers at a reasonable price to be fixed by the Government, and the Government would be responsible for the distribution. If that were so, the distribution would be done on a more equitable basis. . If the price was £3 15/- at Auckland, it would be the same at Whangarei and Dargaville. He considered this' scheme to be a good one. Two Sides To Question. Mr W. Begg: It was never the intention to build the works without the consent of the suppliers. Mr T. Donovan: There are two sides to every question, and I think that Mr Hill is a little premature in his move. When we get a license it will be a lever to use to get concessions from the proprietary concerns, and now you want to throw away the lever. I understand that if the license is granted the suppliers will be circularised and will be able to vote for or against the proposal. I am sure that you would have been paying £4 a ton today if this proposal had not been mooted. When you get a lever ,to work with you want to throw it aside. It is what you have been working for for years. Then again this is to be a cooperative concern. Proprietary companies pay 13/- a ton tax, and co-oper-ative concerns nothing. Mr Hill has admitted that he has not seen the proposal of the company. How then can he criticise it? Mr A. E. Harding said that he was opposed to dairy companies taking shares directly or indirectly in a fertiliser company. A dairy company’s work was to make and market butter. The manufacture of other things had been tried and with butter-boxes all knew what had happened. They should not let the dairy companies be dragged into this new scheme. Mr C. Taylor said that Mr Appleton had taken the directors into his confidence, and he would -call a meeting at the right time. It was no use calling one till all the facts were available, and until they had a lever to turn the log which way they wanted. They had been fighting the fertiliser companies, Mr Taylor said, “and you can bet your life that they will budge now. They can see we have a lever.” The obtaining of a license would not cost the suppliers one penny. Mr Taylor commented that Mr Hill had not possession of all the facts, but he paid a tribute to his courage in calling a meeting as he had done.

Mr F. Staples said that any talk of squashing the proposal at this stage would be folly. He believed that Mr Appleton was animated by a 9esire 1o do his best for the suppliers. Mr Ben Coleman: I consider the farmers of New Zealand have lost a lot of money in rushing into schemes like this. I am against the proposal. In replying to various speakers, Mr Hill said that Mr Donovan’s statement that the new company would not-have to pay tax was not correct. The statement of the new company that it would guarantee a reduction of 10/- in the price of fertilisers was silly in his opinion. A suggestion that the meeting adjourn un(til the directors’ proposals were made available was not supported.

A motion was carried setting up a committee to give evidence before the committee of the Bureau of Industries, those appointed being Messrs P- Hill, McLachlan, Keay, Clements, Coleman and Drewitt. A recommendation was made to the committee that the committee approve of the Governmen taking control of the distribution of fertilisers.