LOSS RECORDED

Otago Daily Times, Issue 27197, 28 September 1949, Page 6

LOSS RECORDED

IJNEN FLAX CORPORATION DUE TO SEVERAL FACTORS Parliamentary Reporter WELLINGTON, Sept. 27. A net loss of £9381 is shown in the accounts and report of the Linen Flax Corporation for the past year, wmch were presented in the House of Representatives! The report stated that a substantial portion of this loss was the loss by fire of fibre in store at Methven.

The report added that a total of 7050tons was completely processed during 1948, and this tonnage yielded 7.9 per cent., of fibre —an increase of 0.6 per cent, on the previous year. This was an indication of mcerasmg efficiency in the processing technique. The list of the principal products and their tonnages was: Fibre, 557 tons; rescutched tow, 304 tons; buffed tow, 202 tons; seed, 560 tons; immeal, 437 tons. The. surplus production had been sold overseas at prices equivalent to or slightly beiow production costs., With the return ter sterling parity of the New Zealand pound, the overseas market became uneconomic, and consequently it was necessary to find a local market to absorb the surplus linen fibre produced while making sufficient spinning tow for local requirements. The answer to this problem was the establishment of a weaving industry to supply canvas for tarpaulins. stack covers, horse and cow covers, etc.

The heavy rust infestation of the 1947-48 crop resulted in very light crops of low quality, and consequently most factories were working on short tonnages, with resulting rises in overhead, stated the report. The Winton crop was good, and demonstrated the wisdom of spreading the seasonal risk geographically. The weather broke during the harvest, and much of the straw was darkened in the stack. Assisted by the Department of Scientific and Industrial Research, the corporation is as rapidly as possible bulking up three Russian varieties which are immune to the attack of rust spores, and this year it will be sowing down 70 acres of one variety and 14 acres of another, while the agronomy division has the third still m the plot stage. The preponderance of poor crop processed, the loss by fire of a substantial quantity of fibre in the Methven factory, the adverse effect of the altered exchange rates on export markets for fibre and seed, and the inadequacy of the crop forcing factories below economic levels ,of throughput, were the chief factors underlying the financial reverses suffered in '1948.