STEEL INDUSTRY

New Zealand Herald, Volume LXXV, Issue 23083, 7 July 1938, Page 16

STEEL INDUSTRY

THE ONEKAKA PROJECT

"NO CHANCE OF SUCCESS"

OPINION IN AUSTRALIA ECONOMIC POINT OF VIEW [nr TKI.EGRAPn —IMIF.SS association] CHRISTCHUUCH. Wednesday Tljo project to establish New Zealand iron and steel works at Onekaka is considered by Australian industrialists to have no possible chance of success, according to statements by Mr. C. C. Davis, who has just returned from a business visit to Australia, during which he was in contact with men in the steel industry there. This impression of competent Australian views was passed on by Mr. J)avi£ as comment on the economic practicability of the New Zealand project. It had no reference whatever, ho emphasised, to any political differences of opinion. The fact was, however, at the Onekaka scheme was regarded in Australia as "a liugo joko."

Small Output Aspect Explaining this attitudo Mr. Davis said that New Zealand at present imported a large number of different types of steel product. The prevailing view in Australia was that it was impossible for steel-making units to be run eeonomcially in the Dominion,, hecause of the small output of each type of product. The high internal costs of New Zealand made it out of the question to attempt the development of an export market. The new plant would, therefore, have to depend entirely on the local market.

In rolling mills which Mr. Davis saw at Newcastle he was shown a single largo building completely filled with spare rolls, each designed for a different typo/of product. Each of these, he was told, might be used only once in a year and the value of the whole store was £250,001). The proportion of use in production to the cost of such j equipment would naturally be lower |in New Zealand, where tho demand for each steel product was far lighter. "Doomed to Failure" It was quite clear from Mr. Davis' remarks that Australians with many years of experience in local steel industries consider the Onekaka plan, purely from an economic point of view, quite impracticable and doomed to failure. In further comment on this Mr Davis said that that was no ground for believing that the time would not come, when New Zealand could profitably undertake the production of steel. It was to be hoped that this would be possiole some day, as steel was the foundation of many industries.