KIA ORA DAIRY COMPANY

Poverty Bay Herald, Volume LXI, Issue 18529, 16 October 1934, Page 12

KIA ORA DAIRY COMPANY

ANNUAL REPORT HIGHER GRADING POINTS UNSOLD BUTTER STOCKS The annual report of tho Kia Ora Cooperative Dairy Company, Limited, shows an improvement in grading 'points secured by tho company’s butter, and reviews unsold butter stocks. A diyidend of 5 per cent is recommended on shares, and after providing for this a balance is left of £2731. Tho report, which will be presented to the annual meeting on Thursday, and which has been in the hands of shareholders and business houses for the past week, states: — “Your directors regret that on this occasion in submitting their annual report and balance-sheet for tho year ended June 30, 1934, they are unable to recommend a final payment for butterfat owing to the large amount of unsold stocks. It is their intention to await the result of all sales before making any decision. The surplus in hand, after making provision for depreciation, amounts to £3499 ,8s 2d, which, with the balance brought forward from last year, £lO2 18s lid, makes a surplus of £3602 7s Id. “The directors now recommend the payment of a dividend on paid-up capital at the rate of 5 per cent jper annum, absorbing £B7O 16s lOd, leaving a balance of £2731 Us Id to foe carried forward. It is your directors’ intention to make a final payment as soon as stocks have been sold and the final balance has been ascertained. “London market. —The past season has been the most difficult one your directors have experienced concerning the selling of your export butter. When prices fell below 70s per cwt., they suspended all sales, this resulting in a large portion of the company’s export accumulating. Immediately prices improved, our London agents were instructed to commence selling, but unfortunately the market received

a severe setback and we thought it necessary to again cease selling. The outlook at the moment shows signs of an improvement. Had it been possible for all our stocks to have been sold at 80s, the surplus would have provided a final payment which would have made the payout ono of the highest in New Zealand. The recent fall in values has been, to a large degree, caused by many dairy companies placing their stored stocks on the market in order to complete their sales before the date of their respective annual general mootings. Now that these stocks are off the market, coupled with the fact that Germany is again purchasing large quantities of Danish and Russian butters, we can confidently look forward to, some improvement. “Cream collection. —The cost of this service amounts to .4Cd per lb. butterfat, as compared with £d per lb. last year. It has been brought to your directors’ notice that a few suppliers, whoso farms are situated within a small radius of the factory, have expressed a desire for a change in the system of spreading the cost of cream collection evenly over the whole cream supply. It is, of course, readily admitted that in some areas, cream could be collected at a smaller cost than the average rate. However, it must be remembered that the company has been built upon a co-o’perative system. The cream which is received from districts further afield may cost slightly more for collection, but it must be borne in mind that the quantity from these districts ensures a record low cost of manufacture and overhead expense. Actually, the reductions in these costs more than compensate for the higher collection cost. “Cost of manufacture and general expenses.—The increased output, 1715 tons, as compared with 1606 tons last year, has again materially assisted in reducing the averago ‘per lb.’ cost. “Farm dairy instructors. —Your directors are pleased to record their appreciation of the excellent work carried out by Mr McKenzie. Suppliers are respectfully urged to do their utmost to assist this officer by carrying out suggestions ho may submit to them. It is to bo regretted that only a few suppliers have complied with the suggestion made by the farm dairy instructor, i.e., the erection of cream stands so as to protect their cream from the sun, etc. The erection of cream stands will also greatly assist your cream collectors in loading heavy cans. May we again ask that all suppliers assist in this valuable requirement. “Quality of output.—lt is very gratifying to report a further increase in our average grade—93.sos, as compared with 93.328 last year. The maintenance of improvement in our high quality is entirely in the hands o’? our suppliers. We earnestly appeal for your continued efforts to supply still better quality cream. Whilst the quality of your company’s butter is one of the highest in Now Zealand, we must not rest on our oars. Still higher quality must be the aim of all suppliers. “Pay-out.—-Monthly advance payments have been: July and August, lOd per lb.; September, lid; October, 9d; November, 8d; December and January, 7d; February and June, 83; and June payments were made on the basis of first grade quality, whereas the remaining months were paid on finest quality. Average pay-out, including cost of collection and dividend on shares, oquals 8.77 d per lb. butterfat, finest grade. ‘“Advances to suppliers for purchase of stock, separators, etc.—The reduction in the amount owing under this heading is exceedingly creditable. Your directors take this opportunity to express their thanks to suppliers who have assisted in effecting this reduction. The actual position is even better than the figures in the account under review disclose, in that the advances made during the year, £8127 2s 2d, have been loaned on a basis of security in keeping with present low values. Repayments, £13,372 10s 83, include a considerable number of accounts which were opened on a basis of higher value for the security, and all of the remaining accounts have, with the repayments received, been reduced to a basis in keeping with to-day's values.

“Local sales.—An increase in the sales of Kia Ora (butter is again shown this year. The thanks of the directors and shareholders are accorded to grocers and buyers of our butter. To our shareholders we strongly recommend them to give their patronage to firms who consistently stock your company’s product. 41 Retiring directors. —Messrs G. It. Moore, E. McDowell, and Myles Doyle are the directors who have to retire by rotation. They, being eligible, offer themselves for re-election. ’’