PORK AND BACON INDUSTRY.

Waikato Argus, Volume XXX, Issue 4731, 16 June 1911, Page 2

PORK AND BACON INDUSTRY.

A public meeting of those interested in the proposal to establish a co-operative bacon factory in Waikato was held in Hamilton yesterday morning. The business was to consider the report of the committee appointed to make enquiries as to the advisability or otherwise of taking over an established business or starting new works. There was a large attendance of fanners representing all parts of the district. Report of Committee.

A good deal of correspondence was laid before the meeting. Messrs Adams and Co., of Auckland, gave details of their business, which they said had a share capital of £20,000, and the works had a capacity of 10,000-per annum. The assets were: Land, Stanley street, £3000; Matamata, £400; Otahuhu, £2000; buildings, plant and machinery, £3908; live and rolling stock, £107; total, £9535. They offered to sell part or all the shares to a farmers’ company, retaining an interest in the company if desired, and continuing the management by arrangement. The Waikato Bacon Company, Frankton, placed their assets at £SOOO, including buildings and plant, £4OOO, and five acres at £2OO per acre, £IOOO. The capacity of the works was 10,000 per annum. Thu terms of sale are Paid up shares, £1500; remaining on mortgage at 5 per cent, £2000; cash to vendors, £ISOO. They also offered to continue the management by arrangement.

The cost of forming a new company was estimated as follows: Share capital, £20,000, in £1 shares, 10s called up; site, £1500; cool chamber and railway siding, £2000; leaving £6500 for the purchase of pigs and carrying on the business, the balance of uncalled capital (£lO,000) being available as security for temporary advances from the bank. The available sites at Frankton were quoted as follows:—R. J. Sandes five acres at £l2O an acre—£6oo; Allen Bros., five acres at £250 an acre —£1250; the Powell Woo,. Process Co. live acres at £3OO per ’acre—£lsoo. Ngaruawahia: Thomas Paterson, eight acres, with certain buildings, £IOO per acre £BOO. Mr Simpson’s Report. Mr T. Simpson, engineer for the Auckland Farmers’ Freeezing Co., who was asked to report upon the Waikato Bacon Factory, dealing with the question of site, said if the principle was right that the works should be in the Waikato, then Frankton seemed to be the most central position for supplies and distribution. Proceeding to deal with the Waikato Bacon Factory, he said ; Buildings: I have estimated that if the factory were being built now it would cost about £2200; that is the buildings proper, without any machinery or plant. The proprietors have given the cost at under £2OOO, and this, 1 assume, is the true cost. As the money has been judiciously spent the only question for consideration is the depreciation due to time. Taking into consideration that the framing and weather-boarding are of rimu, on totara blocks, and that a good deal of the work is of recent date. I think the depreciation should no such that the first cost would be wipedout in thirty years from 1902. The iron roofing will probably all have to be renewed before then, ard as time goes on the style and arrangement of the uildinga and plant becomes more or less obsolete. This could be done by writing oil' a certain percentage per annum, or by deducting a fixed sum, one-thirtieth of the first cost, each year the latter being the fairer way. On this basis the depreciation to date is £594, leaving the present values of the buildings £1395. Machinery: From quotations I have received for the Hercules ma chine and Babcock boiler, and for a number of the smaller machines, and my own valuation on the balance; also, accepting Mr Watts’ statement that they have spent £3OO on weighing machines for the various stations, 1 have arrived at a total of £2450. 1 am quite prepared to accept the statement of £2532 as the cost of the machinery. Deprceiation: I am strongly ot opinion that in the case of machinery of this class the average life should not be taken at more than 25 years. It is quite likely that the freezer may be doing good work at the end of that time: but on the other hand an accident may happen at any time (it is of American make), or the macnine may be superseded by something much better. Then in the ease of alterations or additions a good deal of the work done on machinery may be lost. I think the fairest way is to reduce the value evenly over the period named; that is by writing off oi.e-twenty-fifth each year, and on this basis the depreciation for the nine years will amount to £9OO, leaving the present value of the machinery at £1632. Arrangement of the present factory and exten ion of the same; The arrangements at present arc fairly good, and to double the capacity would not seriously interfere with existing arrangements. Additional insulated rooms could be built between the present freezing rooms and the street line, or on the western side, where the cooling room now is, and the slaughterhouse moved back. There is also some 65ft from the main building to the eastern boundary. Cost of doubling the capacity: This would depend on whether the new refrigerator were the same size as the present one or larger, or if the power were gas or steam. I have not had time to go fully into this question ; but, roughly, the cost of doubling the capacity would be about £4OOO to £4500. Land: On the question of the value of the land 1 am not qualified to express an opinion. The site seems to be very suitable, except that it is so close to, and on the windward side of a growing town, that I am afraid that the fertiliser branch of the business could not be carried on for long. In fact, it is possible that in time the authorities may prohibit killing within the town. Siding: I have not seen the plan of this. The department offered to put in a siding for £SOO, but 1 understand that it does not come right up to the works. However, it might be extended to the coal bunker, either on a curve or by a turntable. The cost of a new factory capable of dealing with a maximum of 800 pigs per week : This problem is rather complicated as for three or four months the killing is very heavy, and the carcases are stored and worked oil later on in the slack season.

Considerable storage room will be required for frozen pork, but just now much I have not been able to decide. However, 1 have estimated that tho cost of a new works of the above capacity would be about £9500 to £IO,OOO, not including land or railway siding. Mr Banks’ Report.

Mr E. C. Banks, ol Matamata, reported on a visit he had paid to tho south to inspect factories there. He said ho had first visited the Eltham factory, and found that though they did very well on their first shipments, the Homo market had now been flooded with Chinese pork, and there had been a drop in the price. The Inglewood factory had been run successfully by the farmer for ten years, and the output was about 6000 pigs annually. The capital of the company was £6000; but this was now being increased to £12,000. Each supplier had to take £1 share for every 1001b of pork supplied with a maximum of 40 shares. For the past two years pigs had only been accepted from shareholders, and the system had been found to work very well. With a paid-up capital of £3243 15a 7d, the company had paid to shareholders during the year £404 12s in excess of the market price, and payment of a further sum of £399 18s Gd had been authorised, which would bring the price up to three-eighths of a penny above the market price. On t he average weight of pigs received is equal,to 4s Id per,pig. „ In ad-

dition to this the directors had this year authorised payment of a dividend of 5 per cent, on share capital. He also visited Messrs Dimock and Co.'s factory at Ngahauranga, near Wellington, which was the moat up-to-date affair in New Zealand. Messrs Dimnck and Co. would be the biggest competitor in New Zealand, but he thought considering all things that the farmers need not fear them. He had come to the conclusion that in starting a factory plenty of freezing space is required. There should be enough freezing space for half the pigs taken annually. Just recently there had been a rise of Jd per lb in bacon, and there would probably be another rise of Jd before the summer. Thi j meant that the bacon factories with plenty of pigs in their freezing chambers will probably nett about 10s per pig more than those companies, who, through lack of freezing apace or lack of capital, have not been able to hold their pigs. He thought they would want a capital of at least £20,000, which would enable them to deal with 20,000 pigs annually, and allow them to hold enough pigs in the freezer to take advantage of the price of bacon in the winter months. Considerable discussion then ensued upon the question of site, and the advisableness of taking over an old plant, the questions being raised by Mr Duxfield, of Ngaruawahia. He was convinced, he said, that the Waikato Bacon Co.’s plant was not the machinery they wanted—they should strike out boldly and do keen business, He thought they should approach the Farmers’ Freezing Company regarding the establishment of a factory.

Mr Barugh. chairmanfof.the Auckland Farmera’jFreezing Co., was understood to say that the articles of association of the company prevented them embarking in the bacon business. Some of those present appeared to be in favour of starting new works. Mr Banks said he quite concurred in“this, providing that they could get sufficient shares taken up; but if they could only get £SOOO or £6OOO worth taken up he thought it would bo advisable to purchase the Frankton works, if the Health Department would allow them to go on with the works. Mr Hubbard, of the Thames Valley, had informed him that if the pigs V.ad to be sent any further than Frankton, the farmers in that district would start a factory of their own. Mr Duxfield expressed himself as averse to retaining the management in the event of the Frankton works being taken over. Several speakers, including Mr Barugh, said they would be prepared to put considerable money into it if the present management were retained; lut none at all otherwise. Mr Banks then moved: —That this meeting of farmers affirms the principle of co-operation in connection with the manufacture of bacon and recommends that a limited liability company be formed with a capital of £20,000 in £1 shares, of which 10s per share will be called up as follows: —2s 6d on application, 2s 6d on allotment, and other calls of 2s 6d in not less than six months’ intervals. This was seconded by Mr P. Quinlan, and carried unanimously. Mr Duxfield then moved:—That a committee be set up to confer with the Farmers’ Freezing Company with a view to securing a site and the erection of a plant adjacent to the freezing works, in order that the freezing plant might be used in connection with the manufacture of bacon. Mr R. Swayne seconded the motion. At this stage, in answer to a question from Mr Edegcumbe. Mr Barugh said that though the freezing company could not enter into the bacon business themselves they would, he thought, be quite willing, if they got a guarantee that the farmers would use the works for a certain time, to build a factory. All the farmers would have to do would be to provide the pigs, and run the business. It must be understood that he had not consulted his fellow directors; but he did not think there would be any difficulty in the matter. Mr Quinlan; How much money would the farmers have to find? —We will find the money—we have plenty, and the farmers will only have to find the guarantee. Mr Edgecumbe: In the form of rent?— Yes. Mr Duxtield’s motion was then put and carried unanimously, and on the suggestion of Mr Barugh a committee consisting of Messrs Duxfield, Banks, Macky, Clarkin. Paterson and Shepherd, was appointed to confer with the directors at their next meeting.