BUTTER FACTORY

Southland Times, Issue 19591, 12 August 1922, Page 6

BUTTER FACTORY

A CO-OPERATIVE CONCERN. PRELIMINARY ARRANGEMENTS MADE. At a largely attended meeting of Directors of dairy factories, home separators and members of Southland branches of the New Zealand Farmers’ Union, held in the Y.M.C.A. yesterday, it was unanimously decided to establish a co-operative butter factory in Invercargill. Mr D. J. Heenan presided, between fifty and sixty of those interested in the proposal being prpsent. The meeting was really a continuation of one held some lime ago, when a preliminary committee was appointed to draw up articles of association and to report. The members of the committee were Messrs J. G. Flett, chairman, (Otautau), AV. J Martin (Dipton), J. Bourchier (Mokotua), J. A. Broom (Winton), b. Fowlc (Clifden), D. J. Heenan (Nightcaps) and J. Fisher, secretary (Otautau). The report stated:— On June 23, at a representative meeting held in Invercargill to consider the question of forming a Company for the purpose of working a Co-operative Butter Factory for the Province, we were appointed a Committee to take preliminary steps for the formation of the Company, with directions, to report to a subsequent 'vccting. We beg to repGrt as follows: Four meetings of the Committee have been held, the minutes of which are recorded and will be handed to the Chairman of the next public meeting at which this report will be considered. Your Committee resolved to employ Messrs Macalister Bros., solicitors, Invercargill, to prepare the pioposed memorandum and articles of association of the company. After the draft copy had been prepared, your committee spent a day in perusing and amending same, and the corrected copy will be submitted for the consideration and approval of your representatives when next they meet. We propose the capital of the company should be £50,000, in 50,000 one pound shares. We have endeavoured to make the articles of association as comprehensive as possible and have specially provided against any risk of shares being traded in to the detriment of co-operdtive suppliers. In accordance with the wish expressed at our appointment, we have interviewed the principals c.f the three proprietary butter companies to ascertain if any or all wou’d consider a sale to the proposed co operative company, and at what price. Arising out of these negotiations we have no rec >mmendation to make. We have conferred with the manager of the National Bank of New Zealand, Ltd., with entirely satisfactory results, and provided the foundation of the company is laid on a sound basis and a fair and reasonable share capital subscribed, there need be no fear of the necessary financial help being forthcoming. Several offers of suggested sites have been received and these will be submittd to the meeting with this report. In the event of delegates deciding not to purchase one or more of the present companies, but to proceed to the erection of independent premises then these sites can be considered. Provision has been made in the articles of association for existing co-operative dairy’ factory companies taking shares and also for individual suppliers becoming shareholders as yvell. No section of the dairy- ■ ing comnnnuty has been excluded and an effort has been made to protect equally the rights of all. Individual dairy companies it is suggested should take not less than 50 shares, and are not allowed more than 1000, the allotment suggested being two shares for each ton of cheese. Home separators or other intending suppliers may take shares, a minimam alloiment being five and no shareholder may have more than 100 shares. Il is recommended that the application and allotment fee be 1/- each, and that exclusive cd this not more than 5/- per share bo called up in any one year and that provided sufficient shares are applied for we are of opinion that not more than 5/- or at most 7/- should be culled up altogether per share. It is suggested that shares lx? determinAl on the basis cf one share per lOOlbs of butter-fat. Your Committee convinced, mere than ever, that there is a genuine and strong desire that this co-operative butter factory should be proceeded with forthwith The present co-operative' companies with their completed organisation can. by taking their quota of shares promptly, greatly facilitate the early >• formation of the company and give an impetus to the enthusiasm of individual milkers to become shareholders and suppliers. There is nothing seifish about the proposed company, it is co-operative, and is intended for the general good. We recommend that the articles of association be approved; that this meeting of delegates elect provisional directors; that an immediate canvass be made for shares and that the company be. floated forthwith, and that canvassers be appointed at this meeting: that negotiations be opeue-1 forthwith for leasing premises for the installation of plant, so that operations may be carried on till a permanent factory is erected; that a manager be engaged and operations started for the opening of the season; that prospective suppliers throughout the province be requested to notify forthwith if they are prepared to send their cream to the factory and to furnish an estimate of the number of cows they expect to milk during the season. The articles cf association provide that a director of the proposed company must either be a director of an existing co-opera-tive dairy company or a supplier holding not less than 10 shares in the butter company. In conclusion, the members of the preliminary committee express the hope that the establishment of this co-operative factory will be proceeded with with promptness and enthusiasm and the committee venture the opinion that it marks one of the most important events- in the ;-rugress of the province. Mr John Ksher, prior to rearing the report of the comnrittee, stated tliat he believed that the matter was universally accepted as dessraUo and that the country people as a whole were so sure that it was -going to materialise that many d«d not think it necessary to attend. He hoped, however, that those present were there to see that it vras put over. The proposal bad met with the approval of farmers in every part of the country and he had also had very striking evidence of what shrewd business men thought of the proposition. He had also received the assurance that provided the company could re.isonably comply with the articles laid down by the associated banks, there would be little difficulty in regard to finance. If the factory was to be in operation for the commg season, it could only be by the purchase of an existing company’s premises or by leasing a property which could be converted into a factory until such time as a permanent factory could be established. Two of the local companies had decided not to sell, but a third place was under a firoi offer. After viewing these premises, however, the committee had decided that they wonld not be suitable for them as a permanent home and had concluded not to recommend the purchase. The committee also had several buildings under offer for lease and one of these could be converted into a factory in time to commence operations this season. In the opinion of the committee this [iroperty was well worth while considering. Mr Fisher went on to refer to the value of dairy factories to the people in whose districts they were established and said that collectively they had an enormous effect on the wealth of the Dominion. The establishment of a central co-operative factory was the natural completion cf the work of the dairy farmer, and it was essential that milk should be under the control of those who supplied it, until it was distributed to the public. If established, a central factory would be of assistance to the companies already in existence The committee bad given the ‘ articles of association very careful consideration and he thought that they had been built, up on sound lines. Provision had been made to ensure that the hoffie separator would ultimately have control. It was proposed that there should be seven directors and that the home separators should have a majority

of one on the directorate. He believed that that day they would be able to take a further step forward He had been led to believe that the plant could be\n operation in eight weeks’ time and it might be possible to instai sufficient plant to enable it to commence before then. In rely to a question by Mr Rutledge, Mr Fisher stated that it was not intended to take supplies away from factories already .established, but to work in with them. He formally moved the adoption of the report. Mr McLean suggested that then? might oe some difficulty in getting shareholders to remain loyal to their own company and he considered that provision should be made to prevent shareholders from supply ing to any other company. Mr W. J. Martin seconded the adoption of the report. Mr Rutledge suggested that no fixed official should be allowed to became a shareholder. The report was adopted Mr Rose then moved that a co-operative ijutter factory company be formed for the purpose of carrying into effect the commit tee’s report. Mr Hill seconded the motion, which was carried unanimously. The chairman then called upon Mr H. Macalister to read the articles of association, of which the principal clauses were as follows: The shares shall lie under the control of the directors, who may, subject to the provisions contained m the articles, allot or otherwise dispose of the same to such persons and companies on suc’n terms and. conditions and at such times as the directors think fit. Shares shall lie allotted only to persons or companies who are suppliers or prospec tivo suppliers of cream to the companies. SharehoWers other than dairy factory companies shall be entitled to be allotted one share in the capital of the company for every 10& pounds of butter-fat supplied by such shareholder per annum, but no shareholder shall hold less than five no more thh‘6 100 shares in the capital of the company. Dairy factory companies shall be entitled to be allotted two shares in the capital of the company for every ton of cheese manufactured by such company per antinn but no dairy factory company shall hold less than 50 nor more than 1.000 shares in the capital of the company. Every member shall have one vote for any number of shares up to five inclusive. He shall have an additional vote for every five or part of each successive five beyond the first five shares up to twenty thares. He shall have an additional vote for every twenty shares or part of each successive twenty shares beyond the first twenty shares. Each director shall either be the holder of not less than ten shares in the capital of the company or shall be a director rtf a coopertivc dairy factory company holding not Less than fifty shares in the capital cf this company—The suggestion was unanimously approved. The number of directors shall b? seven, af whom four shall be individual suppliers snd three shall be directors of co-operative dairy factory companies being shareholders in this company. The company shall be entitled to purchase cream from non-shareholdcrs, but shareholder suppliers shall be entitled to receive for the cream supplied by them not less than one penny per lb. of butter-fat more than nou-shirrehoideTs. On the motion of Mr J. Fisher, seconded by Mr Grieve, the articles of association were adopted. The election of provisional directors resulted as- follows:—Factory representatives, Messrs J. G. Ftett, J. S. Grieve and J. Fisher; Suppliers, Messi's D J. Heenan, D. Gordon, W. J. Martin and A. H. Rhodes. At the condution of the meeting a canvass was made of those present who undertook to supply from a total uf 975 cows and to take up fnim 1.800 to 1,900 shares in the company. It was also indicated that an additional 2i»o shares would probably be taken up. Those present also undertook to sec that their neighbours also became suppliers to the factory MEETING OF DIRECTORS. At the conclusion of the general meet ing the first meeting of the provkiona! directors was held. Mr J. [?. Grieve was appointed chairman and Mr J. Fisher secretary. A long discussion took place in regard to the canvass for shares, and it was resolved that circulars be drawn up and a v.gorous canvass be made through the dairy factories and the Farmer’s Union. It was also decided to secure a satisfactory site and to instruct the solicitors to register the cumpaiiy without delay, after which application terms were to oe sent out to intending for signature.