FREEZING FUSION

Poverty Bay Herald, Volume LV, Issue 17408, 5 November 1930, Page 11

FREEZING FUSION

A MOVE FOR ECONOMY DIRECTORS ASK AUTHORITY SHAREHOLDERS’ ASSENT GIVEN Since the recent announcement of tho plans for a fusion of freezing interests between the Gisborne Sheepfarmers Frozen Meat and Mercantile Co., Ltd., and Nelsons (N.Z.) Ltd., the project for the. elimination of overhead costs in the freezing industry has been a. prime topic of discussion among the shareholders of the Gisborne Sheepfarmers Co., and among stock-owners generally throughout the district. Diverse views on the, subject have‘been aired, ami while certain, strong objections to the proposed course of action have been voiced, the greater weight of opinion among the stock-owners seems .to have favored the move, on economic grounds.

The interest in the scheme aroused among the shareholders of the Gisborne Sheepfarmers'’ Frozen Meat and Mercantile Co. was well evidenced this afternoon, when a special general meeting of tho company was held to deal with the request from the board of directors for authority to proceed with the negotiations.

After a. brief discussion, in the course of which flip position was made plain by the chairman, the shareholders gave unanimous assent.- to the proposals outlined.

Tile attendance totalled well over ICC, and Mr. H. B. Williams, chairman of directors, presided. In moving the resolution submitted to the shareholders, Mr. Williams stated that all would agree that a- great deal of good could be effected by cutting out unnecessary expense in the industry. The director? had .brought down the freezing rates last year, but even so not all the stock of shareholders had been put through the company’s works, and if the fusion of interests could 100 effected, the shareholders would be getting nearer Hawke’s Bay prices than would otherwise lie the case. 'The profit in freezing came from handling large numbers of stock, and the nearer they could reach to the full employment of the Kaiti works, the nearer would be the stage at which the company could show a profit for its shareholders.

MR. W. D. LYSNAR ’S VIEWS Before leaving this subject, Mr. Williams read the following letter received by the board of directors from Mr. W. I). Lysnar, M.P., who, he stated, had been expected to provide opposition if opposition were furthcoming : —• “I regret to learn of ilio difficult position your company is in, but under the past and existing circumstances I realise it is what might be expected. “I desire to say that I am strongly of opinion that it is not in the public interest that your company should enter into any arrangement with Nelsons (N.Z.) Ltd, (which is really Vestcy Bros.) for tho joint working of your company’s freezing works. I understand it is recognised both by Nelsons (N.Z.) Ltd. and by your company, as a basis of your negotiations, that your works can do all the killing required in the district at flic present time, and Unit with two works operating both are jeopardised. That King .so, and l it is necessary for one of the works to go out of operation, it should not be tlio farmers’ works to go but the outsideowned works.

“I can see no wrong in your company undertaking ip do any killing for Nelsons (N.Z.) Ltd.,*upon "equal terms with any other person or company, but .1 do not think you should give them any right to take part in the management. If, as it is apparently admitted, there is not sufficient room for two works in the district, why do not your company arrange to purchase Nelsons (N.Z.) Ltd. works right out and close them up, assuming of course that- they will sell at a. reasonable price and give a long period to pay for same at- a low rate of interest. Failing this being possible, tho only thing is to make arrangements to reconstruct the farmers’ works, and to get the Minister- of Agriculture to exercise, his powers under “The Slaughter and Inspection Act” of 1918 to determine the license of Nelsons (N.Z.) Ltd., as I refuse to believe thatlie would sanction the latter firm getting any further interest in; the freezing works of this district-, and under the admitted circumstances the minister should realise that it is in the. public interest that the oversea-owned freezing works should cease operations in this district.” The mol inti was seconded by Mr. A. If. Wallis, who did not speak upon tho project. REDUCED COSTS NECESSARY Mr. Francis ..Stafford supported tho motion, which, he said, embodied a pro jeet oilier than which- the company could see no means of progress, in liis opinion. The award conditions of the present day had made freezing So costly a matter that it- was very necessary to reduce other"costs to a. minimum. (Applause.) Mr. Stafford commented that tlio matter could well be trusted to the directors to finalise.

In reply to Mr., K. M. Hutchinson, the chairman' outlined the proposal in tlie event of a subsidiary company being formed. Two directors from each, firm would supervise the works, and the agreement would ho for 10 years. Each firm would maintain its own works, and the Taruheru works would he kept in order to commence operations if the volume of stock proved too large for the Kaiti works. TJio To'komaru liny works would not enter into the agreement. “ I am heartily in support of' the proposal. hut I presume that the details are not yet fully thrashed out,” said Mr. CJ. .11. Williams. ‘TTowe,ver, I can leave it to the directors to finalise the agreement.” KILLING RATES A question as to what the killing rates .were likely to he during the coiti-c, ing season was raised by Mr. It. ('. Fisken, who stated that according to his calculations, the Gisborne Sheep Farmers Meat and Mercantile Co. had made 4s 2d per head on sheep. The chairman stated that an increase would have to bo made, lie understood, owing to the decreased prices for byproducts and other influences affecting the cost and possible profits of freezing companies. Ho hoped that the increase could he limited to Id per head of stock handled. * There being no further questions, the chairman put the resolution as follow: “That the directors he authorised to enter into such arrangements with Nelsons (N.Z.), .Ltd:, and/or any other company or firm as the directors think expedient for joint working of the freezing business in this district for such time and upon such terms as shall be agreed upon (including, if thought advisable, the establishment of and the leasing of the company's works to a. subsidiary company.” By the unanimous vote of (hose present, tlio motion was curried. The opportunity was taken by (ho directors to obtain from till! meeting approval of certain domestic matters affecting the working of the company, ns embodied in the following motion proposed by the chairman : "That the shipping! and lightering business and the assets thereof as now carried on by and on behalf of and held for the freezing department he transferred to and carried on by am} oh behalf of and held for (ho mercantile department; that the articles of association of the company be amended aa follows: (a) By deleting Uvm

article 6 the words ‘shipping and lightering,’ (b) by adding lo article 7 after the wor,d ‘wootbrokers’ in that article the words ‘and glso the shipping and lightering business of the company'; '(e) by deleting from article 178 all the words after Hie word ‘shareholder’ in the hist sentence of that article.”

In explanation of the. proposal relating to the shipping plant, the chairman stated that the improvement of the harbor facilities lmd resulted in a decrease of the lightering business, and rigid economies had been instituted with llie object of meeting the decreased turnover. It. was proposed to get rid of such vessels as could be spared. The motions, being seconded, were carried without- opposition. The chairman intimated that a furtluT meeting' would lie held in due course for the confirmation of the resolutions.