Page 12 Advertisements Column 1

Timaru Herald, Volume CXXV, Issue 18627, 24 July 1930, Page 12

You aould Know these Facts about the Atlantic Union Oil C? NOW EXTENDING OPERATIONS TO SOUTH CANTERBURY In view of the impending commencement of operations by this Company in South Canterbury we deem it helpful to make a statement regarding this Company's activities to date, and its economic position. The oil trade cannot be conducted in a small way, requiring as it does the provision of elaborate plant and equipment, innumerable facilities for service to the consumer, extension of credit on a large scale, and ability to carry a heavy merchandise stock. Consequently the Company’s shareholders had to be induced to commit themselves to the eventual expenditure of more than £1,000,000 in New Zealand in the form of labour, materials, and equipment necessary for the construction of the Company’s terminals, depots, and a long list of equipment items. Among buildings, tanks, piping, machinery, railway tank waggons, motor equipment, chemicals, hardware, and a thousand and one miscellaneous supplies, the only importations consist of tank plates, a small amount of piping and miscellaneous supplies. Wherever possible, supplies have been purchased in New Zealand, notwithstanding much higher costs in the majority of instances. If this Company had not been formed the consumption of Petroleum Products in New Zealand would have been the same, and the Company’s entry into the field has not added one drop to the quantity consumed. It, therefore, follows that this investment of £1,000,000 is not*being made at the expense of the public, but on the contrary is new money brought and permanently ploughed in. It will probably be several years before even savings bank interest can be earned on this capital. If the oil -trade were conducted only by small firms of limited resources you would pay very much higher prices, and the present admirable supply service would be conspicuous by its absence. Large aggregations of capital can only earn a return by providing you with better service and uniform quality products at reasonable prices. There is a widespread belief that a so-called “ ring ”or monopoly exists for the urpose of obtaining exorbitant prices from New Zealand consumers. There is absolutely no foundation for this thought. No price agreement is necessary, because prices automatically reach the same level no matter how many Oil Companies enter the market, viz., the lowest price at which the products can be sold at a very small margin of profit. If a “ring” should be formed to increase prices beyond the proper levels, speculative and other importers would quickly bring us to our senses. Our friends sometimes ask us why the price of Petrol must be considerably higher here than in England or America. ' Our studies have disclosed the following factors, which should be taken into consideration when discussing oil prices: (a) The product must be carried a minimum of 6,000 miles in tank vessels, which are compelled to return empty. (b) Motor Spirit sold in New Zealand is of higher quality and costs more to manufacture than the ordinary grades marketed in Great Britain and America. We do not market the inferior grade, because we do not believe the saving on this single item worth your while, as it costs just as much to pack and handle the low-grade as the high-grade product. Confusion also arises frequently due to the fact that an Imperial Gallon is 20 per cent, greater than the Wine Gallon measure used in several other countries. (c) The duty on spirit works out at about 80 per cent, of the refinery costs of the product. This means nearly £BOO,OOO per annum on present estimated consumption. (d) The turnover is slow. . That is to say, about six months must elapse between the time a gallon of Motor Spirit is manufactured and the time it is paid for. UNION SUPER SPIRIT (e) A tremendous amount of capital must be tied up in Fixed Assets, subject to depreciation, interest charges, maintenance expenses, and frequently havin°- to be ... scrapped and replaced by new equipment before the old is worn out (f) Distribution costs in New Zealand are admittedly high, as evidenced by comparative English and Continental prices of numerous commodities other than Petroleum pioducts. Handling costs are nearly double those in many countries. Motor bpint is cheap to-day compared with other commodities, and with 1923 prices. The chart below pictures the world situation with regard to petrol prices and a number of staple commodities. HIGHEST LEVEL > reached ' 19 26 LEVEL > 1913 LEVELv! -Li i 5 i II I I | I l I 1 ! WHEAT FLOUR WOOL COTTON SUGAR a STEEL LUMftER CEMENT l UNION SUPER Super Sp n, which NON-DETONATING QUICK STARTING GREATER MILEAGE ? and rapid pick up contribute ,to petrol economy. ; • * INCREASED EFFICIENCY Super Spirit burns completely, No Urrcohsumed liquid rernc down the cylinder walls, causing loss of/compression and pq eto the “surface of the cylinders and diluting the’oil ijvthe « UNION :9-■-N m fed >< r There are men who believe that executive salaries in the oil industry are high. Such is rarely the case. Salaries of Officers, Directors, and Managers of the principal departments of the Atlantic Union Organisation during a recent period of years amounted to one-seventh of 1 per cent, of the aggregate volume of business. Yet if every one of these executives had worked for nothing it would have saved the consumer just ten one-thousandths of a penny per gallon. Thus the average motorist consuming 400 gallons per year would be about three years saving 1/-. This means that about 4d. of your yearly petrol money is used towards the upkeep of the human dynamo which keeps a great industry moving. You will sometimes hear it maintained that the motor car is an economic loss. What more useful adjunct to business and healthful recreation and the transport need of this great country can be imagined? It is estimated that more than £40,090 per day is spent in New Zealand for such items as cinemas, liquors, and tobacco alone—one-half of which sum would supply more than 100,000 New Zealand families with a new motor car every four years. Our confidence that this large capital investment and additional competition would be encouraged by the New Zealand public has been proved by the Company’s enormous success in the North Island which has encouraged the Company to extend its operations to South Canterbury district with the investment of many thousands of pounds sterling. ATLANTIC MOTOR OIL Atlantic Motor Oil L PURE PARAFFIN BASE HIGH HEAT RESISTING N ON-E V AP OR A TIN G Chart, the Refinery specification is now a maximum evaporal ceaf. at 760 degrees Farenheit. EFFECTIVE LUBRICATION Altantic .Motor Oil fears no comparison either in physical c actual operation, regardless of source of crude or method any competitive Motor Oil. Crude Oil. Fc at Paraffin Bas ATLANTIC UNION OIL C2 TIMARU AND CHRISTCHURCH OTHER BRANCHES THROUGHOUT NEW ZEALAND.