SELLOUT WAS PART OF LONG RANGE PLAN

Te Ao Hou, December 1961, Page 36

SELLOUT WAS PART OF LONG RANGE PLAN The unfortunate thing about businesses, even very successful ones, is this: as soon as they get one difficulty solved they run into several others. Towards 1960, Puketapu had two major worries: one was that the timber trade was getting tougher every year. To sell their produce in the future, they would need more and more expenditure: equipment for kiln-drying and dressing timber, and timber-yards in additional towns. Secondly, the easier and more accessible part of their bush was getting cut out so that roading for the logging trucks was becoming an increasingly expensive item. Rangi Ruahina is an invoice clerk at the incorporation head office. In fact, it looked as though it would need to invest a further £250,000 or more to keep going. At the same time Puketapu's timber resources were not unlimited—a further twelve years or so and the bush would be cut out. What would happen then to all the expensive assets? Their disposal value would be only small. The only way to get the money back would be for the incorporation to import timber or to mill pinus radiata—both very competitive fields where today only the very biggest enterprises can hope to succeed. The Incorporation therefore decided to try and get out while the going was good. The present-day leaders of Puketapu 3A Block are Hepi Te Heuheu, paramount chief of Ngati Tuwharetoa and chairman of the incorporation, Mr Paterika Hura, deputy chairman, and Mr Pei Te Hurinui Jones, managing secretary. With them on the committee of management are: W. R. Ngahana, H. H. Patena, R. Hemopo, M. Otene, P. Taite, K. P. Mariu, H. Mariu and J. A. Asher. Most of these men have wide experience in administrative and secretarial work, or have responsible posts in bush work or are experienced farmers. Their decision was to get out of sawmilling altogether and invest the incorporation's assets in farming instead. This idea was not new. It had always been the intention to farm the easier part of the block once the bush was cut out. Part of the incorporation's profits had therefore for some years been devoted to land development and of a total farmable area of 6000 acres, 1600 acres are now being run as a fully developed sheepfarm. Ultimately this area will be subdivided for unit farming. In 1960, the Incorporation began to seek a buyer for the remaining timber in the bush, as well as the sawmills and factories. Again, this was a tricky operation as the buyer would have to pay an enormous sum for all the incorporation's assets—very few firms had money enough to do it. For this reason no tenders were called but approaches were quietly made to large firms which might be interested. Finally, as is well-known, one of New Zealand's three giant timber enterprises, the Kauri Timber Company, made an acceptable offer.

The two men who pioneered logging operations of the Puketapu 3A Incorporation: Left, Toriwai Piwa Jones, and right, the late Walter Ngarue Jones. Both were Maori All Black footballers and golf champions. Walter was killed in a tragic accident with a logging truck. After much hard bargaining, the chief executives of the incorporation succeeded in selling all mills, factories and other properties—among them some the Kauri Timber Company did not really want very badly—and getting a price of £135,000 for them, not much below the original estimate. Kauri bought them because they needed the bush in order to keep up with their own competitors. The timber-cutting rights were disposed of for 25/- per 100 H.D. of totara and 14/- other species. The whole deal will realise an estimated £1,135,000. This money will be ample to develop all the farm lands of the incorporation and settle them as individual farms, as well as distribute a good deal of money from year to year to beneficiaries for a very long time to come. Immediately after the deal, £107,700 was distributed to owners—at £600 per share—and the rest of the down payment was invested in land development. To add to its land resources, the owners decided to buy a property in the Awakino East district, called Matai station. This 1600-acre farm, complete with 3823 sheep and 471 cattle, cost them £55,000. The idea behind this buy was to find other assets to replace those which had been sold to the Kauri Timber Company. Thus the famous £1 million deal has not merely meant the enrichment of the individual shareholders: the incorporation as a tribal business venture has been kept alive on much the same scale as before, with an intended annual investment of £25,000 on land development, out of the royalties paid from year to year by the Kauri Timber Company.