SUGAR WORKS MAY CLOSE.

New Zealand Herald, Volume LXI, Issue 18703, 8 May 1924, Page 8

SUGAR WORKS MAY CLOSE.

DOUBT REGARDING DUTY.

SOME PROTECTION NEEDED.

LABOUR PROBLEM IN FIJI.

POSSIBILITY OF WITHDRAWAL.

Difficulties now confronting the Colonial Sugar Refining Company may lead to the closing of the company's refinery at Auckland and the abandonment of the company's enterprises in Fiji. These possibilities were discussed by the chairman, Mr. E. W. Knox, at the annual meeting in Sydney yesterday.

I Referring to the valuation of the assets of the Fiji Company, which have now reverted to the parent company, Mr. Knox said it was not an easy matter to value fthe fixed investments in New Zealand and Fiji. The former consisted of the Auckland refinery, on -which about £400,000 had been spent, and the difficulty with this lay in the fact that, in consequence of the enormous increase in the working expenses and coastal freights during the past nine years, there is no chance of maintaining the business if there be a reversion to former free trade conditions. These latter obtained up to about four years ago, when the sugar was first handled for the Government, but when it relinquished control last year a small protective duty on competing white sugar was imposed and has enabled the company to carry on.

Loss Under Free Trade. The duty expires in September next, and as all the facts and figures are before Parliament— how increased costs of manufacture and distribution affect the position—the directors still hope it will be recognised that refining on a freetrade basis is impracticable without incurring very serious loss, and that the necessary measure of protection will be granted to avf.rt closing the refinery. Meanwhile, the directors had put . the asset down at its cost, such being much below the amount for which it- could now be erected.

The Fiji business, however, could not be valued in this way, owing to the prohibition of the engagement of labourers in India which is still the governing factor in the company's affairs in that colony. "So far as we are aware," said Mr. Knox, "nothing has yet been done by the British Government to have this prohibition withdrawn, which is clearly in their power, and thus to give us the same opportunity as the Crown colonies of Malaya and Ceylon to carry on a venture that depends on such labour. Till this is effected, we must regard our investment in Fiji, made with the full approval of the Crown, and carried on in every detail as to labour under the strict regulations of the Colonial And India Offices, as one which cannot be replaced in our books, at a sum approaching the original cosft of more than £3,000,000.

Differential Treatment. "We have accordingly written down the investment by £1,625,000, and hope to be able to maintain the assets on this basis. Such will be possible, even with the wages of the Indian labourers at about double the rates paid in Java, as is now the case, provided the value of sugar keeps up to a level very much above that of 1913. Should prices recede to the rates then in force, the abandonment of the enterprise must be considered. : ; . "

"Such an end would be deplorable, but since I went to London two years ago at the request of: the British Government, we have not received even a hint that it is their intention to see that justice is done to us in this matter. And the only reason for such differential treatment of other Crown colonies as compared with Fiji seems to be that we carried out the venture without seeking the aid of London capitalists and with a measure of success that has net attended the establishment of similar sugar factories and plantations in any other part of the Empire.".