DEPARTMENTS OPENED

Te Awamutu Courier, Volume 79, Issue 7136, 23 November 1949, Page 6

DEPARTMENTS OPENED

TE AWAMUTU DAIRY COMPANY’S ENTERPRISE ADDRESS BY MR WILLIAM MARSHALL There was a large gathering of suppliers and representatives of the Te Awamutu district present at a function held in the grounds of Mr A. J. Sinclair’s residence at the Te Awamutu Co-operative Company’s factory yesterday on the occasion of the official opening of the company’s Buttermilk Powder and Trading branches.

The ceremony commenced at 11 a.m. when the chairman of the Board of Directors (Mr B. C. O’Connor) with the Mayor (Mr G. Spinley), the chairman of the Waipa County Council (Mr F. L. Onion), the secretary manager of the factory (Mr A. J. Sinclair) and the chairman of the N.Z. Dairy Products Marketing Board (Mr William Marshall) accompanied by his wife went to the dais which had been erected on the lawn and addressed the representative gathering in turn. Mr B. C. O’Connor welcpmed the suppf ers and (handed ovier Mr Onion who expressed the aims and objects of the Waipa County Council to provide better roading for the rural districts. Suppliers, he stated, were entitled to a better class of road as a result of the high production and large amount of motor taxation which went out of the district. The Waipa County Council had made representations to the Minister of Transport for a larger portion of the funds to which it was entitled. In the meantime the council was doing all it could to lay sealed roads through all districts in the county. In regard to the back areas of the county, it was his belief that the amenities of civilisation should precede the development of new land for better roads meant better production. Mr G. Spinley, one of the original directors of the company stated that the dairy industry had a strong bearing on the, economy and progress of Te Awamutu. He congratulated the management on the progress and growth of the company, a company in which all of the suppliers contributed to the capital and to the management. Mr A. J. Sinclair, who in addition to being the secretary-manager of the company is a member of the Dairy Board stated that he had spun, a coin in front of the Hamilton Post Office in an attempt to make a decision as to whether he would start a factory in Te Awamutu or at Pukekohe. The coin had come down heads and he had come to Te Awamutu. The company had been formed in 1925 without a bank overdraft. Instead, money had been borrowed from E. G. Rousen, of Tooley Street, London. However, lawyers had said that the company should have £5OO cash which was hard to find in those times. He was walking up the street to cable Mr Rousen that the company was a failure when he had met Mr A. G. Warburton who had taken him to a bank and given security for the £5OO. He was one of the men to be thanked for the fact that the company had started and become a success.

Many old families which were suppliers to the company in those days were still represented, and Mr Sinclair mentioned some of the names ■off welj-iknown families (in the Te Awamutu district. When the company had first started, the Board of Directors had wondered what they would do when the factory reached an output of 1000 tons per year. That amount had been reached in 3 years and to-day it was 2500 tons per year and still increasing. Profitable Adjunct Dealing with the manufacture of dried buttermilk which the company was undertaking, Mr Sinclair stated that for the first three years a gauranteed price of £6O per ton FOB had been set and thereafter the price would be subject to negotiation. It had been calculated that at the rate of £45 per ton, the dried buttermilk scheme was six times more profitable than the pig farm which the company had had prior to the scheme coming into force. Mr O’Connor stated that the company had spent a sum on the trading department which it was expected to recoup in one year. The trading department was for the good of both the suppliers and the company and was a truly co-operative business, he said. In the dried buttermilk department, the company had looked well ahead and the steam and space were available for future extensions should they be needed. Mr William Marshall in his opening remarks, congratulated the company on its enterprise. He stated that] very few of the suppliers would have obtained any measure of success in the district if it had not been for their wives going along by their sides. It was the family units out on the farms which contributed to the success of the company. Speaking of the Trading department, Mr Marshall stated that it was a useful as well as serviceable adjunct to the company and to the extent that it was supported by the suppliers, to that same extent would it succeed. It would be a material saver to the suppliers as well as a benefit to the company.

Of the dried buttermilk department, he stated that it was a wise step and that it would bring a better return when sold for human consumpion than it would if used for feeding pigs. The gap between the sales of butter and margarine on the home markets would cause the country to make a greater utilisation of the solids in milk, other than fat, as a further economy, he said. Insofar as the development of the utilisation of all milk solids throughout the country was concerned, he thought that it would be a certain and gradual development. The country should in time be able to produce a greater portion of dried buttermilk than any other country in the world Speaking on the stresses of compel tion in the Waikato, Mr Marshall stated that if the suppliers were not going to make the guaranteed price a farce, and were going to have cooperation then those stresses should not be beyond the will of the suppliers to defeat.

Returning to the dried buttermilk scheme, Mr Marshall prophesied that

it would double its production in three years. No Grounds for Pessimism • Speaking of a recent newspaper report which was a report of an address delivered by him, Mr Marshall stated tJiaWhe heading, “Grave Warning.” was unnecessary 7. There were no grounds for pessimism as it was estimated that there would be a good market and good prices for a few years yet. It, however, behoved the people to keep costs in check as there was a world trend towards lower prices. The whoie country should expand production as much as it possibly can, Farmers should consolidate themselves and put as much back into the land as they possibly could, as good times could not be expected to go on for ever. The year before last long-term contracts had been drawn up with England and at that time it had been thought that in the seven years of the contradb that production /would be increased 20 per cent, as a result of increased fertiliser, more incentive and the return to the land of exservicemen.

In the 1947-48 season thewe had been 149,000 tons of butter and 89000 tons of cheese shipped to Britain. In the first year of the contract there had been over 11 per cent, increase in production which had been assisted by a favourable season. That had been a good step on the rejad towards fulfilment of the promise of a 20 per centincrease in production. In the first three months of this season there had been 41,015 tons of butter graded for export, an increase of 18 per cent, or 700 tons over the first three months of last year. There had been 20,245 tons of cheese graded for export also, an increase of 9.6 per cent, over the first three months of last year. If the season continued in the same favourable manner, the 20 per cent, increase which had been promised Britain would be realised in under two years. The farmers, Mr Marshall emphasised, should take advantage of the favourable conditions to bump up their production and expand the industry in general as a safeguard against a possible recession in the future.

World Parity Indefinable Mr Marshall stated that he found it impossible to define world parity. There were two trading groups, the soft currency of sterling group and the hard of dollar currency group. Due to the non-convertibility of those currencies there \:ould not be a free movement of goods between those two groups, therefore, they could be ruled out as being a basis of assessing world parity. Those countries which traded with Britain in soft currencies were New Zealand, Denmark and Australia in the main. In quantity of dairy products, New Zealand led Denmark, who -led Australia. Parity with Australia this year would be equal while that of Denmark w’ould be Jabout 19s per hundredweight for butter above New Zealand prices. Allowing an advantage of 9s freight costs the difference was about ten shilling per hundredweight in Britain to Denmark’s advantage. Dealing with the price of goods bought with funds obtained overseas through the sale of produce, Mr Marshall stated that at the end of the war, New Zealand was buying dear and selling cheap. At the present-day the cost of goods from Britain were assessed and the price of butter was calculated in relation to those costs, making for mutuality of interests between the two countries. Through that relativity of prices no serious hardship would befall the country. The policy of commission was to sell produce and the bulk of New Zealand’s exports were sent to Britain. A total of 97 per cent, of all produce for export went to Britain and the other three per cent, went, last year, to 18 different countries realising £500,000 more above the price obtained in Britain and $1,250,000 in hard currency. The trade with America was done in their winter months when their reserves of dairy produce was low and good markets were available at excellent prices, usually in September and October. It was expected to nett New Zealand £400,000 this year over and above the prices obtained in Britain for goods sold outside that country. Following that policy, the Commission, while reserving greater quantities for Britain, was expanding New Zealand’s markets and assuring the future stability of the industry. Cushioning the Blow Mr B. C. O’Connor stated that in view of the possible recession in prices, the Commission could cushion the blow to the farmers for a number of years from the reserve accounts until the cost had been reduced in proportion to the recession in prices. Farmers might not have a legal claim but they had a moral right to more than was held in the reserve account by the Stabilisation Commission, the farmer had been subsidising the consumer for a number of years and he also had a moral claim on the socaMed lump sum payments of some £35,000,000

Following the addresses, Mrs Marshall was asked to open the trading department by cutting the ribbon across the doorway, which she did in a graceful manner. The whole gathering was at liberty to then inspect the department w’hich was well stocked with provisions. The company was able to inspect the buttermilk powder department which was working and which also had been officially declared open. As each person went through that department they were presented with a sample of the buttermilk pow 1 - der.

An admirable repast was provided under a marquee on the lawn of Mr Sinclair’s residence.