BRICK MERGER.

New Zealand Herald, Volume LXVII, Issue 20596, 21 June 1930, Page 11

BRICK MERGER.

FIRST YEAR'S WORK,

UNIFIED CONTROL.

REVIEW OF BENEFITS.

(Published by Arrangement)

The first annual general meeting of the shareholders of Consolidated Brick and Pipe Investments, Limited, was held in the Chamber of Commerce Room, Dominion Building, Wakefield Street, Wellington, on Juno 18, 1930. Mr. T. E. Clark, tho chairman of directors, presided. Other directors present. were Messrs. R. J. Murphy, James Fletcher, C. E. Richardson, Hendry Luke, T. Miller and Andrew Fletcher. Tho directors' report, which had already been circulated to shareholders, stated that for the period under review the company's investments yielded dividends amounting to £21,641 7s sd. Tho recommendation of tho board for the payment of a dividend of per cent, on tho paid-up capital, amounting to £19,496 9s 9d, was carried, while the directors' honoraria of £3OO was approved. This left a balance to be carried forward of £1844 17s 6d.

Tho report stated that in addition to tho dividend now carried, shareholders received in October last an interim dividend for their holdings in the Amalgamated Brick and Company, Limited, and Amalgamated Brick and Pipe (Wellington), Limited. Administration expenses, which were purely nominal, were borne by tho subsidiary companies. The balance-sheet shows that tho capital consists of: —

600,000 shares of £1 each . . . • • • £600,000 0 0 Less unissued, 41,270 shares >■. ■ * 41,270 0 0

Issued capital, 558,730 shares • . • • £558,730 0 0 As there is 12s 6d uncalled on 2700 shares tho paid-up capital amounts to . . . . £557,042 10 0 This together with tho amount of tho credit on Profit and Loss Account of . . 21,641 7 5

makes a total of •. . £578,683 17 5 Tho assets consist of: Shares in other companies i •.! . • £556,792 10 0 Sundry debtors »* v.x 21,891 7 5

Making a total of »« £578,683 17 5

In moving the adoption of the report and balance-sheet, Mr. Clark mado some observations on tho moro important phases of tho company's operations. Tho chairman stated that perhaps it would bo desirable, for tho benefit of those shareholders who may not bo familiar with tho ramifications of the company, and its relations with the various subsidiary concerns, if the position generally were briofly reviewed.

Mr. Clark recalled the fact that about 12 months ago the various brick and pipo concerns in the Wellington district had, after very careful investigation, decided to amalgamate the different interests. This had followed on that which had started in Auckland, where all the principal companies engaged in tha clay industry had come together with very satisfactory results.

The principal reasons for the mergers wero that material advantages were to be secured from unified control. In keeping with other manufactures, vast improvements in production methods in the clay industry had been achieved in other parts of the world,' and if those in New Zealand were to keep pace with modern developments, it was felt that advancement could not tako place without a heavy increase in the cost to the public. Everyone engaged in the industry recognised that the time was ripe for alteration in methods, and in the production of better clay goods, but owing to the costly competition in the marketing of tho products, and the relatively high cost becauso of tho comparatively small production of each individual works, there was insufficient margin to do very much in the way of better and more advanced methods. Rationalisation ol the Industry.

Tho rationalisation of industry was tho keynote in older lands, and it. was felt, that if the New Zealand clay industry was to be put on a proper footing somothing similar would have to bo done in Wellington and in other parts of tho Dominion. It was apparent to those in charge of tho various undertakings that by bringing about a merger there could bo brought into operation in tho first placo, a reduction of overhead and managerial expenses; by the individual works specialising in special branches of industry, improvements in production methods and a bettor quality article could also be produced. Tho introduction of mass production and reduction of costs by group purchasing were also rendered possiblo under tho now scheme. It was natural, therefore, that sooner or later, tho wholo of tho North Island interests would unito to form 0110 strong company, and this had been accomplished when tho Auckland and Wellington groups joined forces. Tho company which was meeting to day is purely a holding company, and while Consolidated Brick and Pipe Investments, Limited, as a company is not actively engaged in any trading ventures, it deponds for its revenue upon dividond distributions from tho various subsidiary concerns in which its funds are invested.

Tlio company to-day is interested in no less than twenty plants, cloven of which aro 111 tho Wellington provincial district, comprising works at Wanganui, Carterton, Mnuricovillo, Miramar, "Wellington City, Silverstream and Lower liutt. In tho Anckland territory there aro nino different plants, including works in Auckland City, liobsonville, New Lynn and Whangarei. Thoro are, of course, over twenty other works in tho North Island outside tho Consolidated Company. "It was not an easy matter," said Mr. Clark, "to reconcile all tho various interests, and great credit, was due to tho various boards of directors for tho 'give and tako* spirit that had been so much in evidence and without which it would havo been impossible to havo brought about tho placing of tho industry on such a satisfactory footing. It was only a littlo over twolve months sinco tho combined businesses had been merged as one, and tho result of the first year's trading was most satisfactory considering tho difficulties that had to bo surmountod and tho depressed trading period through which we had passed. >

"It was inevitable that in. the taking over of such a large amount of concerns a fair amount of reorganisation would have to be done—that is if the business was to bo placed on tho best possible basis. In many cases the number of individual lines that were manufactured had been improved and standardised. Instead of half a dozen different works all making tho same variety of chimney pots, for example, this particular branch of tho industry had been entrusted to the works most capable of producing these goods. Although the full amount of economies of this character wore nofc altogether reflected in this year's trading figures, results would be apparent as time went on. Heavy Capital Expenditure Necessary. " A considerable amount of capital expenditure had to bo incurred in the bringing of tho various works up-to-dato and making them as efficient as it was possible to have them. In Wellington alone no less than £19,453 had been spent on improvements in the last few months. This would give some indication as to the amount of money required to put the plants, efficient as they were, in the best possible condition." Thanks to Directors and Staff. Mr. Clark stated that he desired to express his sincere appreciation for tho ready co-operation and loyal support accorded to him by his fellow directors and members of tho staff during his term of office. In seconding the motion for the adop™n of tho report and balance-sheet, Mr. it. J. Murphy, Wellington, stated that no thought that tho shareholders had every reason to be gratified with the year s working, considering the fact that tho various trading organisations controlled by the company have, in their first years results, been subject to disabilities which were inevitable when commencing on new_ lines. The company was fortunate inasmuch as it enjoyod tho advantages of a fairly buoyant deitiand for its products in the Wellington district. Building Trade Dull. In Auckland, unfortunately, business in the building trade had been extremely dull; in fact, less-building had been done thero than for many years past.. In regard to tho outlook for the future, Mr. Murphy stated that although business in the Wellington territory was not nearly so good, as it had been it was hoped to maintain trado at a satisfactory level. He was sorry io sfty, however, that in Auckland- thero was likely to be a continued i lull in building operations for ' some time to come.' One of the factors, which would undoubtedly affect tho trade of the company, and, in fact, of anyone engaged in tho clay industry, was thafc both local body and Government expenditure was likely to be curtailed for some little time to come. This meant that drainage operations, the mairi source of tho company's demand for pipes, would be quiescent. Tho farming community, too, which in normal times took a largo quantity of field tiles, were, of course, adversely affected by present-low prices for our produce and wool, and ifc was likely thafc for a time trading in this particular department would he somewhat slack. " Shareholders, however, can rest assured," said Mr. Murphy, that the whole position is being very carefully watched. In the Wellington district it had been necessary to close down some of the works temporarily, owing to the fal]ing-off ifi trade, while in Auckland tho bulk of the brick plants had been stopped pending tho cleaning up of the present stocks. " During the last 12 months the lot of ; the directors had not altogether been free from anxiety, and the members of the board generally had had a very strenuous time in closely supervising the various concerns." In speaking to the report, Mr. C. E. Richardson, Wellington, stated that shareholders must derive a certain amount of pleasure from tho knowledge that the company's products wero infinitely better than they were some time back. A considerable advance had been made both in regard to tho quality and the variety of clay goods now turned out by the various concerns controlled by the Consolidated Corporation. Artistic Brick Buildings. The requirements of both architects and builders had been met as much as possible. ■ Wellington people must have noticed with a good deal of satisfaction the magnificent brick buildings in the city. He referred particularly to Nimmo's in Willis Street and A.' and T. Burt's in Courtenay Place, and Hamilton Chambers on Lambton Quay. It might be said that these were an ornament to any city. In Auckland, 'too, a tremendous advance had been made in the style of bricks produced in the last few years. In Auckland bricks had been artistically used in tho Qtieen's Arcade, Mr. Arthur Cleave's new seven-storey building and tho new orphanage of the Ding Wall Trust, just to quote a few instances. " In the Silverstream works," said Mr. Richardson, " new and up-to-date machinery had been installed for the production of what is known as American bricks. This was the class of brick used in, the Nimmo Building in Willis Street, Wellington, and it was also very much in evidence in Auckland in the newer type of office block."

Mr. Richardson stated that while, of

course, it was satisfactory to get a reasonable rate of . dividend, it was pleasing to him, as one of ,_the instigators of the movement to improve the quality of clay goods, to find that the building public wero appreciating what was being done by the industry. Over 2000 People Involved.

"A fact," said Mr. Richardson, "which was probably not fully realised by most people is that in tho clay industry represented by tho various concerns under their jurisdiction, over 2000 people were directly or indirectly concerned. This point "had to bo kept carefully in mind when making any' necessary staff alterations, and at a time when there was so much unemployment about it troubled tho directors not a little to have to cut down their staffs. If, of course, building conditions continued to bo depressed they unfortunately, in common with other industries, would have to reduce sail. "Certain anomalies in regard to prices had been in evidence when tho various companies amalgamated tlicir forces, and it was necessary, therefore, to make price adjustments in connection with tho sale of tho company's goods, but in making these adjustments tho public on tho whole is better served to-day than ever before, and I may say your directors recognise the responsibility of. and indeed the necessity for, improving that service whero possible in tho future." Mr. James Fletcher, Auckland, stated that ho was very pleased to bo present, and to ho able to present to shareholders such a satisfactory report, taking everything into account. An Age of Specialisation. "This is an ago of specialisation," said Mr. Fletcher, "and it is also tho day when mass production methods are concommitant with aggregations of capital. It. would have been quite impossible for such developments to have taken placo in tho brick industry without adequate financial resources. The company, in developing its subsidiary concQrns along sound lines, was really building for the future. It will take some years for the full benefits to be derived. The ago of tho old-style brick has disappeared, and builders and architects to-day, and the general public too, for that matter, demand better and more varied goods." Invitation to Shareholders. Mr. Fletcher extended an invitation to all shareholders and in fact to members of the public, to view tho company's offices in the Hamilton Chambers, Lambton Quay, Wellington, or . in the Queen's Arcade Building, Auckland. An inspection of the brick work in these offices would'give soino idea as to the tremendous development that has taken place during the last few years. It would havo been impossible, said Mr. Fletcher, for any individual company to havo achieved anything like the same results Referring to the company's facing brick, he claimed that tho product was second

to none in the world, being equal to tha best produced in the United States. Nofc only had cut-throat tactics been eliminated for the amalgamated companies, but greatly improved quality had been brought about. The merger had resulted in the introduction of hollow tiles for floors and partitions, and this was a new departure. Had the various clay-working companies not come together, progress could nofc have taken place, and some of the concerns would have gradually come to grief. He predicted that the rationalisation of the brick industry would be one of the best things that 'had happened in New Zealand during recent years, and if other leading industries were to follow suit, this Dominion would be very much better off.

Mr. Fletcher referred to one of the activities of the company, and remarked on the making of the concrete pipes for the Miramar drainage system. At the company's works, Lower Hutt, there wero made for this scheme the largest concrete pipes which were ever manufactured in New Zealand. In establishing this plant, the company had been of distinct service to the City of Wellington. On being put to the meeting the report and balance-sheet were unanimously adopted. Tho retiring auditors, Messrs. Gilfillan and Gentles, were re-elected. A vote of thanks to tho chair terminated tho meeting.