TE AWAMUTU DAIRY CO.

Waikato Times, Volume 104, Issue 17493, 29 August 1928, Page 9

TE AWAMUTU DAIRY CO.

ANNUAL MEETING. ! HIGHLY SATISFACTORY YEAR. I BIG INCREASE IN SUPPLIERS. There was a large attendance of suppliers at the annual meeting of the Te Awamutu Co-operative Dairy Co., at the Town Hall, Tc Awamutu, yesterday. The chairman of directors, Mr C. M. Alexander, presided. ! In moving the adoption of the rc- : port and balance-sheet, already published, the chairman referred at the outset to the rapid growth of the-com-pany. which, inside three years, had reached the scale of an 800-ton factory. They started a little over two years ago with 40 suppliers and today they had 180. He mentioned that, out of a total of IG2 dairy companies making butter in New Zealand, there were only 15 which showed a larger output in the last official list. Increased supply was beneficial, he said, only when it was accompanied by the strictest economy in manufacture and administration, and in this respect he thought the results shown in the company’s accounts must be regarded as highly satisfactory. Reduction of Liability. The chairman pointed out that the large increase in supply had had a most beneficial effect in reducing the company’s liabilities for buildings and plant. After a total depreciation of £750 had been written off, the company’s assets (including some recent additions to plant) stood at £IO,OOO, while the liability on same had been reduced to £GOOO, although ttie deduction from suppliers (Jd per lb) was less than that made by a number of other companies, and still left the actual cash payment to suppliers at a figure which would more than stand comparison with other factories. He stated that if the present rate of repayment were continued, the whole of'the liability would be liquidated in another two seasons. Repayments for Shares. Mr Alexander mentioned, however, that, owing to the rapid rate at which share capital was being taken up, it was possible that some alteration might be made by the directors in the direction of easing the repayments for shares. Already, he pointed out, the shares taken up (£9302) almost covered the capital cost incurred, and it would not be good policy for the company to continue indefinitely allotting shares on the present basis of £i per 1001 b butterfat, as tills _ would result in an over-subscription of capital. lie mentioned a number of methods of overcoming this difficulty, and said that the directors were going into tlic whole question thoroughly during Ihe incoming season. The aim of the directors would be so to adjust the share capital position that, if possible, the resumabie value of the shares would lie 20s in the £. The question was of such importance that it was possible the directors would convene a special meeting of shareholders and submit a scheme for approval. The problem, lie added, was a pleasant one to tackle, and few companies had to give it consideration so early in their career. Mr Alexander added that he wanted to see the shareholding basis put on a proper footing and made a credit to the company. He wanted to see every man who went out of the concern'' take out 20s for every pound he had put in. (Applause.) Monthly Advances. Dealing further with policy matters, the chairman stressed the point that Ihe directors’ objective had always been to make monthly advances to suppliers on as liberal a scale as was consistent with safety, and he believed that this course had been appreciated by most suppliers. Liberal monthly advances and large final payments, however, did not usually go hand-in-hand; and although the supplementary payment to he made at the close of the meeting was extremely satisfactory, and placed the company’s total cash payment at a high level, lie thought the directors would like some indication from suppliers as io whether the present policy mol with approval. He added humorously that the directors were prepared to make the final payment up to any figure the suppliers liked to name, provided always that the-board received notice a! the beginning of iiic season. His own personal opinion was that it was j wrong for a dairy company io with- i hold money from suppliers during the j season with the object of accumulat.- j ing a large surplus, as this forced many men to borrow from their companies money which belonged to them, and on which they had to pay high rates of interest. F. 0.8. Belling v. Consignment. The policy of the hoard in connection with f.o.b. sales and consignment j was then touched upon by the chairman, who warned suppliers that a good deal of the criticism against f.o.b. i i selling was of the “sour grapes” var- j S ietv, and generally emanated from ! i large companies which were unable ; I to sell f.o.b. in sufficient quantities to j i make any appreciable effect on the j I season’s output. The policy of the ] ; directors,, lie said, was to lie on the ! | alert io lake advantage of high f.o.b. i offers, but under no circumstances j I would they go beyond a 50-50 basis so far as consignments and f.o.b. sales j were concerned. The policy of ; ‘“keeping ajl the eggs in one basket, ; and watching the basket,” he added. ! was not favoured by the directors, and ; the f.ojb. sales made last season, and , ! for the present season Io date, at- . j though representing a very small per- ; cenlage of the total output, had been highly satisfactory. Quality of Butter. The chairman concluded by urging ! upon suppliers the strict necessity of j keeping cream up to the highest pos- ; siblc grade on the farm. He pointed j out Unit the exhibits at the meeting, I in tlie form of cups and medals, show- j ed that the company could man'ufac- j lure a high-quality product provided j the raw material was up to standard, j In this connection, lie expressed ap- j predation of the action of 1 lie lie- | partrnent of Agriculture in permitting j Mr W. Dempster, Chief Government i Grader for tile Auckland province, to j attend the meeting and address suppliers on the quality and care of cream on Ihe farm. Mr Alexander then formally moved the adoption of the report j and balance-sheet. What he described as the only "fly j in the amber’’ was referred to by the | speaker. This, lie said, was the i quality of their butter, which had not been quite up to the standard it j should have boon in all cases. They 1 had a first rate staff, and it had been | proved that the fault lay at the door I of the suppliers. Cream was most I susceptible to odours, and too much i tainted cream was received at the fac- j tory. It might he described as bor- \ uer-line stuff, and from it a super-

fine butler could tint possibly bo made. The speaker therefore urged shareholders to make a special effort to send in only the highest quality cream.

Dealing with rural credits, Die chairman said the company had formed an association anti had made satisfactory arrangements with the Government for advances to those suppliers who had become shareholders in the association. The secretary, Mr A. Sinclair, had done a tremendous amount of work in 1 lie matter and he was deserving of the highest thanks of every supplier. It behoved every supplier to take up shares in

the association. By doing so they would assist each other. Mr Hooper suggested that in future nominations for directors be closed some time before the annual meeting. Mr Sinclair pointed out that Hie position was governed by the articles of association. Under these it was necessary for nominations lo he in the office three weeks before the annual ■meeting.-- There was no objection, however, to reminding shareholders of Ibis' by circular prior to the closing of nominations each year. A recommendation to this effect was carried. Answering a question, Mr Sinclair

said all companies were paying 2* per cent commission for the sale of their butter, since the return of free marketing. During the period of control Ihe commission was 2 per cent. Mr G. 0. Jourdain was unanimously re-appointed auditor at a fee oft4o guineas, as against 20 guineas last year. The increase was due to the greatly increased work following on the company’s rapid development.