ONEKAKA IRON WORKS

Nelson Evening Mail, Volume LXXII, 1 February 1939, Page 10

ONEKAKA IRON WORKS

WHY NOT USE THE PLANT ?

[To The Editor) Sir.—lt is puzzling a good many people why the Government do not go . ahead and produce iron at Onekaka with the plant that is there. The works , are in fair order, and the blast furnace . could be running in a fortnight. It is , ■ a good little plant, and only the wharf , tand the cable tram to it need some rej pairs. It is capable of producing 30 ’ tons of first class foundry iron per j day. The ioundry and railway require- : ments amount to some six to eight thousand tons per annum. Then there is a plant for making i cast iron pipes. This was installed by j the old company to use up the surplus | iron, because it the blast furnace pro- ' auced more iron than New Zealand i could use, and it is necessary for econo-! mic working that a blast furnace should 1 be kept in continuous operation, i Both these plants could be worked profitably, and would employ a number of men, and save—l do not know exactly how much —but between £50,000 and £IOO,OOO per annum from being sent overseas. That is what the Government say they want. Why don't they do something about it? The reader may ask: “Why then did the old company not continue?” The immediate cause of shutting down was the slump, when orders for iron fell to 25 per cent, of normal. Over and above that, however, they were confronted with cut-throat competition from outI side. For example, the agents of one I of their competitors received instrucI tions to keep consistently 5s per ton beI low Onekaka. and the prices for pig j I iron fell rapidly from £8 per ton to I about £5. j In the case of cast iron pipes also the I importers cut prices. One class of pipe I' selling at about £l4 to £ls per ton when II Onekaka started competing, dropped to ! between £9 and £lO. The competing j companies, being strong financial cont cerns, could afford a loss for a year or | two on their New Zealand business, and amply recouped themselves later at 1 the public expense. The prices did not stay down when Onekaka closed up! I have no doubt that they were “dumping,” but this is so difficult to prove that the anti-dumping Act affords little or no protection. This temporary price-cutting by financially strong firms in England and elsewhere is the bugbear of any new secondary industry starting in New Zealand. The fact remains that at existing prices both those plants could be operating profitably. They could employ between them 100 men besides the in- • direct effect on coal mining and ship- | ping.—l am. et.c, IRON. _ Nelson, 31st January.