COMPANY MEETING

THE ASSOCIATED PORTLAND CEMENT MANUFACTURERS, LTD.

SALES WELL MAINTAINED DIVIDEND OF 20 PER CENT.

SIR P. MALCOLM STEWART ON GROWTH OF GROUP'S ACTIVITY THE fortieth ordinary general meeting of the Associated Portland Cement Manufacturers, Limited, was held, on the 3oth ultimo, at the Council Chamber of the Federation of British Industries,

Tothill Street, London. Sir P. Malcolm Stewart, Bt., O.B.E., D.L., LL.D., the chairman and one of the managing directors of the company, presided. The chairman, after dealing with the details of the accounts, continued:—We are able to recommend the payment of the final dividend on the preference stock and of a final dividend on the ordinary stock of I24 per cent., making 20 per cent. for the year, which compares with 224 per cent. paid last year. There will then remain a balance of £2,806 to be added to the carry-forward, which will thus stand at £208,699. Speaking frankly, the results are somewhat better than was expected a year ago, our total sales being well maintained. Further, we reaped to a greater extent than anticipated the benefit of economies arising from capital expenditure on works. Had it not been for the advance of 3s. a ton early in the year, to meet the substantially increased manufacturing costs, the results submitted to you today wauld have been of a very different character. The formation by manufacturers of associations and federations through co-operation is still looked upon with suspicion by some. In the early years of this century their status was uncertain. I remember one association, in which I was interested, once hurry- ing its funds out of the country on good advice. It is due to legal evolution, effected through High Court decisions, that the reasonable activities of manufacturers' associations have been gradually given a greater measure of security. We have travelled a long distance from those pre-War days towards a more complete control of industry. Successive Govern- ments have passel legislation of a far-reaching character enacting a degree of control beyond anything which industrialists would have ventured formerly to embark upon. Further, such measures have been fortified with bureaucratic powers to an extent which has alarmed some competent to judge. It is true that Government intervention usually takes place when the industrial patient is very sick, particularly when labour troubles are so severe as to threaten the well-being of the State. Consequently the medicine prescribed is of a curative nature. It is not surprising it does not always effect a complete cure. Correct diagnosis needs much skill and experience.

THE FRUITS OF SELF-HELP

Several factors have operated to bring our industry out of adversity into prosperity. In the first place, cement manufacturers have had to learn through hard experience ;he lessons of adversity. This has undoubtedly helped common sense to prevail and en- couraged the spirit of give and take. During the past thirty years there has been a varying degree of co-operation. There have been trials and errors, but from the efforts made there has always emerged something constructive which has strengthened the common faith in the cause of co-operation. Government assistance has not been sought to put our house in order; it has been an effort of self-help. A high degree of efficiency has been procured in respect of pro- duction, but for some time there have been weaknesses, which have been a matter of common knowledge, with regard to distribution and selling of Portland cement. The liaison between our group of companies and he Tunnel company made some twelve months ago is working wee.. It has directly contributed to the possibility of making more orderly the somewhat chaotic selling conditions. What

now sought is the provision of a similar plan to benefit the industry as a whole and, as opportunity affords, the consumer. This should, of course, give a more complete control of the price at which cement is sold. More effective control if obtained need not of itself he a matter for objection. The true issue that arises is whether control will be wisely used to the advantage of all interested, in- cluding the consumer. I maintain there is no warrant for the assumption that the position will be misused in view of our past re cord and known determination to encourage construction of all description by the fixing of prices at as low a figure as is reasonable.

How THE CONSUMER FARES

Let us consider the plain facts as to our treatment of the con- ' timer. If the cost and the net home prices per ton realised in 1925 are represented by too, then our total cost of production has come down from too in 1925 to 68 in 1938—that is to say, we have effected a reduction in cost of 32 per cent. on every ton manufac- tured. I think you will agree that this is a very satisfactory achieve- r,-ent, bearing in mind the advance in prices of materials required for maintenance and manufacture, as well a's the increase of wages paid to our employees, whose improved conditions of service I will iefer to later.

Now, with regard to the consumer, taking the average net price Per ton obtained in 1925 as too, the 1938 average price received horn him was only 66 per cent. of what he paid us in 1925, a

reduction of 34 per cent. as compared with fourteen years ago. Thus, in addition to giving away the saving in the cost of produc- tion on each ton sold in the home market, we have given the consumer a bonus of 2 per cent.

Last year the margin of profit earned per ton was only 6t per cent. of that earned in 1925, a decrease of 39 per cent. It goes without saying that it would not have been possible for us to have reduced our prices to the consumer so substantially and made more recently over due improved returns to our stockholders had we not been successful in marketing a much larger tonnage.

Reverting to our reduction in cost of manufacture, I should like to stress the fact that this reduction has not been obtained in any way at the expense of our employees. Since 1925 increases in wages amounting to 8s. per week have been granted, and wages are now about 16 per cent. higher than they were in that year ; all our employees have for twenty years enjoyed a week's annual holiday with pay and for eleven years a profit-sharing bonus scheme. More recently contributory pension schemes have been instituted.

The published prices for Portland cement usually quoted are those to the consumer at destination. A fact often insufficiently appreciated is that from these prices heavy deductions have to be made before the net price at works can be arrived at. These deduc- tions embrace such items as freight and handling, merchants' rebate, deferred rebate, discount and bags. These charges vary according to method of distribution and distance of transport, but under favourable circumstances they represent 3o per cent., and in some circumstances 45 per cent., of the price charged to the consumer a: destination.

THE SERVICE RENDERED BY COMBINES

I have spoken of industrial organisations, and now I will say something of combines. Speaking after many years of industrial experience, during which I have fought both against and for com- bines, I am convinced the advantages envisaged have amply accrued and that generally speaking combines render a greater service to the community than would be obtainable from the aggregated indi- vidual service of the component firms which form them. Investiga- tion will, I believe, show that this is true. Labour in particular has benefited. Wages, rates of pay and conditions of work in combines are found to be of a higher standard

It has been represented to me that I should urge the claims of concrete in connexion with A.R.P. work. I must decline to do so, since it has been publicly stated that the whole question of the provision of deep and other forms of shelters is receiving close consideration. The experts are at work, and the Cement and Concrete Association has offered its services. Certain aspects of the problems involved are not simple and a decision must be awaited with patience.

NEED FOR DEMOCRATIC SERVICE With regard to the present serious international situation I ven- ture to offer a suggestion ; it relates to an aspect which has perhaps been somewhat overlooked. Should not the Government, the Churches and the Press bring more influence to bear in the teach- ing of what will be primarily required now that aerial warfare would bring the horrors of war into our homes? Let these authori- ties clearly tell every citizen that his first duty is to show the same calm courage and fortitude as was so gloriously displayed by our officers and men in the Great War. Is it fair play between man and man to place responsibility of service only on those willing and ready to do their duty? If our people did but realise the menace which hangs over them they would rise and say arms alone will not suffice and demand what I term democratic service as their un- hesitating answer to the tyranny which threatens peace and liberty. Democracy will not survive on the merits of its past achievements, however great, but only through its courage in adapting itself to the necessities of today. Would not a period of democratic service strengthen the true spirit of democracy, help to lessen invidious class distinctions and, above all, give that sense of comradeship which was born in the War and survives today in the British Legion. Why wait for war to light again what peace can kindle now? Let us re-learn the meaning of Nelson's immortal words, " England expects every man to do his duty."

At all our factories adequate air-raid precaution work is pro- ceeding and will shortly be completed, in such a way as to afford protection and first-aid treatment for all headquarters staff and employees likely to be on duty in an emergency.

The opportunity is being taken of demonstrating the use and value of our Products in the construction of shelters. The cost of the work undertaken for our group of companies is estimated to be in the region of k60,000.

I will now review the prospects for the current year. We have not made such a good start as we did last year. Our home trade deliveries are down. After making allowance for the unfavourable weather early experienced, there is evidence that the demand has fallen off, although it has started to pick up, as is usual at this time of the year. However, we can hardly expect to reach this year the peak deliveries of the past year. To attain this there would have to be an increased demand for large constructional work and a good demand for A.R.P. work, which is not yet in sight. If the Government finally decides that shelters offering a greater degree of safety and permanence are needed, these will doubtless require Portland cement, but it must be borne in mind that there is so far no direct evidence that such shelters will be either on a large scale or call for rapid construction. Consequently, while the outlook is fairly satisfactory, provided peace abides, I cannot today lead you to expect that the results obtained last year will be fully maintained.

The report and accounts were unanimously adopted, and the meeting ended with a vote of thanks to the chairman, directors and staff, moved by Mr. K. 0. Hunter and seconded by Mr. Leslie H. B. Pratt.