THE MEAT INDUSTRY.

New Zealand Herald, Volume LXVI, Issue 20419, 22 November 1929, Page 15

THE MEAT INDUSTRY.

WELLINGTON EXPORT COY.j

LOSS ON YEAR'S BUSINESS.

A PERIOD OF DIFFICULTIES.

[by telegraph.—own correspondent.! WELLINGTON. Thursday. Regret that the' improvement in tha affairs of the company reported last year had not been maintained was expressed by the chairman, Mr, 0. S. Watkins, a& the annual meeting of the Wellington Meat Export Company to-day. "In my remarks at ' the last annual meeting I stressed the need for. caution owing to the speculative nature of the industf-y," said the chairman. .-'"Tha extent of the decline in values, particu* lui 'y in meat and wool, was totally unforeseen, and although every care was taken in the conduct of the company's operations it was impossible to avoid a loss on the year's business. The board, realising the seriousness of the position, appointed an executive committee; which' met weekly throughout the year and . closely supervised .the buying of live stock, the selling of meat and by-products and the cost of manufacture, so thafe everything possible was done to minimis® the loss. „ •; ...' Problem Before Company. 'The executive was ■ faced with the question of continuing buying at prices which they knew must yield a certain loss or in the alternative closing the works The latter course, in addition to involving the loss of a connection built up over a great number of, years, would also mean the "incurring of heavy overhead expenditure which might easily, be greater than the actual loss sustained by trading. The directors, therefore, had no option but to continue . buying. "When we take into account the facfi that meat, particularly lamb, declined about 20 per cent., wool 30 per cent, and other products about 10 per cent., it will be realised how'difficult it was to keep losses within reasonable bounds. In addition to the trading difficulties, the <3irec« tors had to contend with a much-re-stricted killing season, with a smaller output, which, while perhaps reducing the trading loss, adversely' affected the factory profit. The meat industry generally has been passing through a long period of deflation, with occasionaj upward movements, but prices have novr reached a level which, perhaps, if noli bedrock, will at least leave less room for losses on realisations of meat in the future. General Position Sound. "The balance sheet does not show much variation from the previous year except that there is an increase in th® bank overdraft, which is accounted for by capital expenditure on the works, an increase in stocks held at September 30 and the loss on the year's trading. The general position of the company is quito sound and under satisfactory conditions of trade output there is every reason to believe that . the future will be brighter than the past. The tremendous tosses suffered by all operators during the last year cannot continue and there is an earnest desire on the part of ail j interested in the trade to get the industry. lon a more satisfactory footing. There is every indication that it will be possible to buy fat stock during the coming seaI son on a lower basis than last year and j more in conformity with the selling price ' at the other end."

In seconding the chairman's motion for the adoption of the report, the Hon.E. Newman, M.L.C., said it was neces-. sary to buy stock by competition or closa the works. The company was started 40 years ago as a farmers' company, but if the farmers did not rally round to support it the company must follow the? same line 1 as other companies and fall. More Support Urged.

Many of the growers did not support the company" when offered the sama prices as were paid by Qther companies.: Year after year the company was paying farmers more than the sheep were worth and that could not continue. The shares were now quoted at ss. and the farmers should buy every share that .came on the market. The prospects were better this year than last. The directors had kept costs down to a minimum.

Mr. M. Marks said the company should resume its legitimate business and become an agent rather than a purchaser. The chairman said the farmers declined to freeze on their own when the company and other companies were prepared to pay more than the stock was worth. The on!y thing was to make freezing costs as" low as possible. The company; had tried to get prices down morr- than any other company In reply to a question, the chairman said it was not proposed to reopen the Kakariki works unless it was insistently demanded. V

Mr. W. S- Bennett and Dr. P. Knight were re-elected directors and Messrs. Hunt and Wheeler were reappointed auditors.