DAIRYING INDUSTRY.

Thames Star, Volume LVII, Issue 15127, 18 February 1922, Page 5

DAIRYING INDUSTRY.

INTERESTING MEETING. • SUPPLIERS’ QUESTIONS. ;a A representative meeting 1 of the Suppliers to the New Zealand Cooperative I Dairy Company in the Pjrongia district was held in the library on Tuesday afternoon. Mr T. C. Grace, convenor of the local committee, presided, and explained that the meeting'had been convened in order to submit a list of questions to Mr. A. J. Sinclair, assistant manager to the company, who was present. These questions had been considered at a previous meeting of suppliers. In rising to reply, Mr. Sinclair said he was glad to attend with the local director, Mr. J. T. Young, and give all possible information on the company’s operations. As member, of a co-operative company, shareholders were entitled to get the fullest information, and although it was a fair hurdle to answer off-hand 17 carefully prepared questions, he. trusted he would be able to remove some of the difficulties which existed in the minds of the suppliers. Mr. Sinclair then read the questions, and answered them as follows:

(1) What is the approximate present financial position of the company?—Mr. Sinclair commenced by giving the position of the company, as disclosed in the balance-sheet for last financial year. He then dealt particularly with the butter branch, and showed that at the present motment the company had assets in that branch in the way of land, buildings, plant, and machipery to the approximate value of £300,000. The paid up capital of the butter branch to date was £219,500. He asked the suppliers to' remember the fact that they had not sufficient capital in the company to cover the actual assets, although these were well written down. This would no doubt serve to clear away any misconception as to the action of the directors in making calls for share capital. He warned suppliers that all co-op-erative movements in New Zealand were weak on this point, and were considerably under-capitalised. The only possible method of getting into a strong financial position was for the shareholders to shoulder their responsibilities, and see that the actual amount invested by the x company, in land, buildings, plant and machinery was covered by share capital, thus making companies, to a large extent, free of the financial institutions. V NUMBER OF STAFF.

(2). A list of names and dates of all appointments at the head office since June 30, 1921?—Mr. Sinclair Replied that on June 30 last the number on the head office staff was 72; the number at the present time was 81, showing a net increase of 9. It should be remembered, however, that since the present financial year had commenced, the head office in Hamilton had taken over a large portion of the Thames Valley work and the milk powder branch. The company was also dealing at the prewith about twice the number of orders from suppliers, com-, pared with the same period of last year. On a basis of output the company equalled 36 of the dairy companies in the Manawatu and Taranaki, and when , this was taken into account, the head office staff of 81 could not be considered excessive.

(3) What is the expenditure to date on account of, the company’s coalfield? —Mr. Sinclair explained that the company’s coalfield consisted of 1200 acres of freehold land, and 2000 acres of leasehold. The freehold had cost about £2O per acre, and there was a mortgage of ,£12,000 on the coalfield. The development expenditure to date was £38,048, and it was anticipated that a further expenditure of about £13,000 would be .necessary, in connection with the installation of plant, etc., before the end of the season. The speaker explained that the season before last £19,000 had been written off in connection with ,sthe coalfield, and that on last season’s butterfat a deduction of Id per lb •butterfat had been taken for coal and timber shares. Information was then submitted showing the estimated quantity of coal, and Mr Sinclair maintained that suppliers would yet find that this had been an exceptionally fine deal. , The company used between 70,000 and 80,000 tons of coal a year, and when the railway was through, he would not be surprised if the coal could be obtained at approximately half the price that was paid for it last year. A marketing of produce. (4) Give all possible information defiling with the present arrangements with regard to the marketing of butter and cheese on the English markets? —Mr Sinclair explained the methods in which butter and cheese were sold on consignment to London merchants who established letters of credit with the bankers here. He' said many suppliers were of opinion, that the company .was big enough to get clear of the Lon-

don merchants altogether, bub he gave some information showing the relative quantities of butter sent from this country compared with the total amount consumed. When it was remembered that the total export of butter from New Zealand this season would be 40,000 tons, and that people at Home were eating butter at the rate of 5600 tonst a week, suppliers would see that any move on the Home markets on the part of dairy companies, would have to be taken very cautiously.- The London merchants had built up very valuable distributing connections, but there was no doubt that a tremendous improvement could be effected.

(5) Give all possible information as to what Mr Goodfellow is doing in London; also the cost of his visit and approximate date of his return? —Mr. Sinclair explained that agencies had been fixed up in Canada and America by Mr Goodfellow personally, for handling our products. 0n the Home market Mi 4 . Goodfellow had been of great assistance right np to date, and a full statement was given showing the steps taken to counter the action of the Imperial Government in unloading stocks of stored butter on the market in the month of December. The position had been bad enough, said Mr. Sinclair, but had it not been for the determined ’efforts made by the producers at this end to carry out the scheme submitted by Messrs. Goodfellow and Ellison (the London representative of the National Dairy Association) there is no doubt that a total collapse of the butter market would have taken place. (6) Explain the reason-for the delay in payment of last season’s bonus? —Mr Sinclair made an explanation on the lines already reported in the press. He said that the letter from Mr. Lees, of the Imperial Supplies Department, had certainly caused considerable uneasiness amongst suppliers. The company had’ replied on receipt of the letter resenting the imputations, and informing Mr. Eees that evidently he did not understand the position. Mr. Lees had replied that he had made no imputations whatever against the company. Mr Sinclair said the matter had been considered at a meeting of directors on Monday, and the chairman of directors and the secretary of the company were proceeding to Wellington this week to endeavour to get the matter brought to finality. Since the matter of the Government subsidy had first’.been brought up a payment had been received on account. There was also a dispute concerning a claim made by the Dairy Company in connection with “suppliers’ butter,” but he felt sure the Prime Minister would give every assistance in getting this matter cleared up. POWERS OF DIRECTORS. / (7) Should the powers of the directors not be limited?—Mr Sinclair said that the powers conferred on the directors were given by the shareholders under the articles of association, and any proposal to limit these powers must be brought before the annual meeting of shareholders. He had no doubt that this referred to the basis of shareholding, and reasons were given to show why it was impossible for a definite basis of shareholding to be inserted in the articles. A basis that was suitable for butter shares would not be suitable for cheese or casein; and the suppliers should remember that the directors themselves, being dairy farmers, were affected by any change that was made. He had no doubt, however, that this matter would be brought forward at the proper time if the shareholders desired a change.

(8) Who were the former vendors of the company’s coalfield? —Mr. Sinclair replied that part of the freehold had been bought from Kelso’s estate and part from Mrs Craig, and the leasehold had been fixed up with McKinnon’s trustees. He took the opportunity of scotching the rumour' that the managing director and the chairman of directors were connected with any syndicate that sold out to the Dairy Company. The statement was absolutely * without foundation, and these gentlemen had been connected neither directly nor indirectly with any such syndicate. (Applause). (9) What is the reason for the company’s manufacturing its own boxes and crates? —Mr. Sinclair said that the contract price for timber had been exceptionally favourable at the time, and it was confidently anticipated that a large saving would be effected in this department. (10) What is the connection between the Zealandia Milkfoods Company and the New Zealand Dairy Company? —In I’eply, Mr. Sinclair gave details concerning the establishment of the Zealandia Milkfoods i Company for the manufacture of skim-milk powder. That company had originally been subsidiary to the New Zealand Dairy Company, and Niere had been three connecting links. First, Mr. William Goodfellow was managing director for the New Zealand Dairy Company and

for the Zealandia Milkfoods Company. Second, the Zealandia Milkfoods Company had entered into an agreement not to manufacture either butter or cheese and to sell the whole of its cream to the New Zea- , land Dairy Company at current rates. Third, the New Zealand Dairy Company reserved the right to take over the Zealandia Milkfoods Company any time after a pertain period at valuation. Reasons were given ■> for the amalgamation of Milkfoods • with the Dairy Company, and the liability of the shareholders to the dried milk branch of the business was explained. THE COMPANY’S PAPER. (.11)' What does the Company’s paper known as the Dairyfarmer do to support itself? —Mr Sinclair explained that it took the same method of supporting itself that every other respectable journal did, namely, charged as much as possible for advertisements. (Laughter). There had been a good deal of non-recur-•nng expenditure in the first year, and although the journal had not been self-supporting during the first 12 months, there was no doubt that many suppliers appreciated the paper, and would be sorry to see it discontinued. (Hear, hear). (12) What connection had the Company with “Antiseptic Safonia?” —Mr. Sinclair said the expression reminded him of that “blessed word Mesopotamia.” The Safonia Company had no connection whatever with the New Zealand Dairy Company. Orders had been taken on butter-fat cheques by that company, and legally the New Zealand Dairy Company was bound to carry" r out these orders. (13) Why does the Company employ two chief graders?—Mr Sin- » clair replied that, owing to the extensive territory, this was necessary. There were about 50 grading stations altogether, and two men were necessary. v ; (14) Explain the discrepancy between the butter-fat shown in the herd tests as' compared with the factory tests? —Some information was given by Mr Sinclair, pointing out that suppliers must make • allbw.anees in connection with herd tests for milk used on the farm; for losses y in separation; and for the fact that samples were taken only two days in the month'for herd testing, the balance of the month being estimated. \ (15) Is the proxy system of the Company the best procurable?—Mr Sinclair said the proxy system had been adopted by companies all over the world, and could not be improved upon. He wished-to disabuse the > minds of the suppliers, however, of the erroneous idea that directors were elected by proxy. Ballot papers were used, and proxies were only necessary to settle questions that might crop up at the annual meeting. CLERICAL ERRORS. Of what value is the merchandise? (16) Of what value is the mer-. ehandise department to the siqD pliers? —The fact, said Mr Sinclair, that suppliers had placed orders with the merchandise department last season to the value of £178,000 was a fair indication that it was appreciated. He believed that the company’s trading branch acted as a valuable check on the other companies operating on the market. (17) Why are there so many errors of a clerical nature? —Mr Sinclair replied that one reason might be found in the fact that not onethird of the present head office staff had been with them for two years. He noticed, however, that complaints were not nearly so numerous now, and it would be only a short time before they were practically eliminated. Mr. F. C. Cuff considered that a special vote of thanks should be accorded to Mr. Sinclair, eulogising the work he was doing on behalf of the company during very difficult times. Mr. A. E. Fear, organiser of the Dairyfarmers’ Union, supported Mr. Cuff’s statement. He himself would not like to change, places with Mr. Sinclair at this time. The resolution was carried by acclamation.