A Legacy for the future

Extracts from a book of the same title

The early Dalton was described in 1910 as being a “small collection of buildings around a railway station, altitude 3390ft. It has grown and prospered over the years largely because it is the headquarters of The Union Co-operative Ltd which has also grown and prospered. 

Dalton was named by William L’Estrange who bought part of a farm from the Boast brothers who had named the farm Dalton after their home village in England.

The decade of the 1920’s was a period of trial and tribulation for wattle growers in the Natal Midlands. The growers were encountering a very real threat of being either squeezed out or taken over by the bigger growers or companies.
In 1924 our founding fathers, Mr. W.S.R. Surrendorf and Mr. F. Nuss, were handed a life line by Mr. Maister who offered to sell them the Maister Limited wattle bark mill in Dalton. Therefore they went on an extensive recruitment drive amongst the small wattle growers of this area.

Their objective was to sign up as many members as they could to form a company to be named Union Co-operative Bark Milling Company.

On Saturday 20th June 1924 at 11am a meeting of interested persons was held in Dalton, at which meeting a – “Co-operative Agricultural Company” under Act 28 of 1922 was formed.
Finally, on 19 January 1925, the Union Co-operative Bark Milling Company was launched at a meeting in Dalton with 71 members and a share capital of 1670 pounds sterling. 

Assisting Mr. Surrendorf and Mr. Nuss were other founding members who toiled hard to recruit members. These were Mr. Heinie Kusel and Mr. Otto Klipp.

There toils were not in vain as many of these pioneering members went on to serve Co-op all their lives and in some cases the Co-op torch was kept alive and carried forward by their sons and grandsons.

The first Chairman of the Co-op was the Honourable W.A. Deane who served only in a caretaker capacity.
Mr. J.P. Nel was appointed as Chairman of the first Board on 26th February 1925. The first Annual General meeting was held on 26th March 1926.
Mr. James Craib was appointed as auditor at 75 pounds sterling; they still serve the Co-op today in the form of PriceWaterhouseCoopers.
At this meeting the Directors decided not to take any remuneration: a decision which lasted 13 years until 1939.

The new Co-op did not survive without its problems as it had been established without working capital which had to be raised in the form of loans from the Land Bank. During the years of the Great Depression, in the late 1920s and 1930s there were occasions when the Land Bank at first refused requests for loans but, fortunately, always relented in time to keep the co-op afloat.

The first request for financial assistance from the Land Bank followed a Special General Meeting held on 1st April 1926 when it was agreed to ask for a loan of £6000. The next loan taken from the Land bank, in September 1927, was a sum of £15000 taken to pay off most of the debt outstanding to Max Maister for the purchase of the mill.
At around the same time the co-op acquired a second bark mill owned by R.H. Oellermann and Sons, which was situated on the opposite side of the road from Maister’s mill at Dalton.

Because it was mainly due to W.S.R. Surrendorf’s initiative that the Co-op had become a reality he was appointed the first Managing Director of the Co-op.

Another load of Bark for the Union C-operative Bark milling Company. Mr Maister’s mill had been a one man operation but when the Co-op came on the scene with a Managing Director, Chairman and Board of Directors, there wasn’t a room big enough to accommodate their meetings. So they had to use the weighbridge office in conditions so cramped and crowded that if someone wanted to leave the room to go to the toilet, everyone had to get up to let them pass.

In the early days the main agricultural crops were maize, sweet potatoes, millet and potatoes. The first wattle grower in the Dalton area was the Honourable Fredrick Angus of the farm Ravensworth. He obtained seed from Sir George Sutton, one of the early Prime ministers of Natal. In March 1931 the first signs of a serious problem surfaced at the Annual General Meeting. This involved the disloyalty of some members who were bypassing the co-op to sell their bark production to propriety companies. The extent of the problem came to light at the Annual General Meeting the following year when it was reported that due to both drought and the smaller tonnages of bark sent to the mill, the co-op had sustained a loss.

In 1932 further problems arose as the Land Bank was not prepared to lend any more money to the co-op due to the lack of loyalty of the members. It was only after Mr. W.S.R. Surrendorf’s personal assurance that the Land Bank would not lose any money that they relented.

On 25 May 1933 the co-op lost its first official Chairman when Mr. J.P. Nel, who had held office since 1925, died.

Another Co-op founding member passed away in 1935. George Handley, who succeeded HJ.P. Nel as chairman on 26 May 1933 and served until his death on 1st November 1935.

1936 was to be another crisis year for the Co-op. The crisis occurred when the Co-op attempted to make a loan from the Land bank and this was turned down. A delegation from the Board and the company’s lawyer went to Pretoria. The meeting was not a pleasant one especially for the delegation and they thought that this was the end of the Co-op. The lawyer stayed behind at the request of the Land Bank and the outcome was that the Land Bank would advance the Co-op a loan as long as the management of the Co-op was improved. That improvement was that Mr.  H. Kusel must be made the managing director. It became clear that the only man capable of saving the Co-op was Mr. Heinie Kusel.

At the 1937 AGM it was noted that despite the fact that the Co-op had no working capital it had retained a top position amongst S.A. bark exporters. Also mention was made of the fact that it was essential for the Co-op to erect a wattle tannin extract factory.

New developments were under way in the timber world and, at a special general meeting held in February 1938 the Co-op took the decision to become affiliated to the newly established South African Wattle Growers Union (SAWGU). Seven Co-op delegates were nominated to attend the first SAWGU Congress on 10th March 1938 in Pietermaritzburg.

In March 1938 at the AGM it was announced that the Co-op had made a profit for the first time, some £1258.

At the 1940 Annual General Meeting the profit of the Co-op was declared at 8000 pounds. The record production of bark had been sold and the prospects for future sales had been enhanced by the acquisition of the wattle extract Company in partnership with SA Wattle Bark Milling and Export Association. With World War 2 raging, 1940 could have been expected to be a difficult year for Co-op financially. Fortunately exports of bark remained high.

At the Co-op’s 16th Annual General Meeting on 18th March 1941, one of the Co-op’s founding fathers WSR Surrendorf, resigned as a director.

WSR was able to resign in the knowledge that the Union Co-op had finally turned the corner and was in a profit situation following all the crisis of the early years.

At the 1942 Annual General Meeting, five years after it was mooted the decision was made to put off the building of an extract factory until after the war. One of the main contributing factors being that the main manufacturers of the equipment required were busy with the production of wartime requirements.

At the 1944 Annual General Meeting a very important decision was taken. That was to lodge a post war order for the erection and equipping of a tannin extract factory. To cover the costs members agreed to a levy of 10s per acre towards the development.

A notable point in the history of the Co-op was the death of Henry John Commins who had served on the very first board of directors and was Chairman from 1935 to 1937.

In the Co-op’s 21st year and the year the war ended (1945) the maiden dividend was declared - some two and a half percent.

In 1947, with the troubling war years behind, it became even more apparent for the need to erect a tannin extract factory.

In contrast to the pre-war situation the Land Bank was only too keen to lend the now more financially viable Co-op some money. The bank agreed to lend the Co-op 87000 pounds towards the project provided its members supplied the balance of 25000 pounds. Members clamoured for a place in the action and applied for shares in the sum of 126000 pounds.

At the 25th Anniversary Annual General Meeting the Chairman, Hershensohnn was able to announce the news that the Co-op had handled a record production of 16000 tons of bark during the year. It was also announced that the Co-op’s membership had reached 250.

In 1952 the Union Co-op Wattle Extract Factory went into production with a throughput of 80 tons of dry bark a day; this was to increase to 160 tons a day in 1956 and 240 tons a day in 1966.

The years 1952 to 1959 were years of consolidation for the Co-op. Members received dividends and money was paid into a general reserve.

In 1952 J.M.N.A. Hershensohnn retired as the Co-op’s then longest serving Chairman. A period of 15 years from 1937 to 1952. He became the Co-op’s first honorary life president until his death in 1954.

Other Co-op stalwarts who passed away in the 1950’s were:-
1956 Vice Chairman
G.V. Howard.
1958 the Hon W.A. Deane.
1959 H.F. Schroder.
1960 the father of the co-op WSR Surrendorf.

In 1956 a dam was constructed on the Ekamanzi River to supply water for factory and domestic use.  Pumping through the eight kilometre long pipeline commenced in 1956. The dam wall was raised in 1965 in order to increase the dam’s capacity to 55million litres of water.

In 1959 the Union Co-op submitted a report to the Minister of Agriculture recommending that legislation similar to the Sugar Act be enacted so as to allow the wattle industry to properly regulate its own affairs. In 1959 Mr. Pieter Volteyn “Volly” Van Breda joined the Co-op and was to become a major instrument in the establishment of a sugar mill at Co-op.

The question is still posed today – who first conceived the concept of a sugar factory located in the Natal Midlands. Was it Illovo Estates or was it Union Co-op? The answer is that Co-op was debating the pros and cons of a sugar factory long before the issue was first considered by Illovo.

On the 22nd May 1964, Dr. Diederichs gave permission to Union Co-op to manufacture sugar, in conjunction with wattle extract at their factory in Dalton by using the diffusion method. This was a ground breaking announcement because not only did it usher in the “Golden era for agriculture in the Midlands” but it was a revolutionary means of extracting sugar.

Sugar officially arrived on 2nd June 1964 at a Special General Meeting when the Co-op was renamed – UNION CO-OPERATIVE BARK AND SUGAR COMPANY LTD.

The total cost of the Sugar Factory was £2 750 000. Work commenced on site in March 1965 and the factory, (the first specifically commissioned) in August 1966.

Initially the co-op directors were planning a factory with a through put of 50 tons of cane an hour with buildings, conveyors and plant designed to cope with 100 tons an hour. But in the end the co-op decided to think big and purchase a diffuser with the capacity to process 100 tons of cane per hour. A problem had emerged in the mill where the 100ton an hour BMA diffuser could only manage 60tons an hour and extraction was mediocre. Through a freak accident, when a boulder went through the mill and damaged the cane preparation knives, it was discovered that by reversing the rotation of the knives extraction shot to 98% to record the highest ever seen in the South African sugar industry.

The Co-op’s 48th Annual General Meeting, held on 16th August 1972 was tinged with sadness and nostalgia when long serving chairman and director Heinie Kusel decided to take a well earned retirement.

He had served as chairman for 20 years and was also the longest serving director on the board having been appointed 47 years earlier at the co-op’s first Annual General Meeting. Heinie had accepted the demand of the Land Bank in 1937 to assume the position of managing director of the co-op.

Due to the inability of the BMA diffuser to handle 100 tons of cane per hour the decision to expand the sugar factory was taken in 1972.  The expansion was affected in the 1974/75 off-crop. Also in 1973 a loan was taken to put in spray drying equipment at the Extract factory.

An interesting chapter in the Union Co-op saga during the first 12 years following its entry into the sugar industry involved three takeover bids. The first bid, in 1964 by Illovo Estates, was made even before the factory was built. The offer of R1 000 000 was rejected. The second bid, in 1969 – also from Illovo, wherein the co-op mill would be converted to a refinery. The offer was turned down.

The next bid came from C.G. Smith Ltd in 1978, an offer in the region of R6 000 000. This offer too was rejected.

One of the Co-op’s most successful projects was the Supplies section for members where they receive the benefit of factory prices. Another advantage is that Co-op has never looked on the Supplies Section as a means of profit but only as a service to members. The supplies section began operating from the main office in 1960 and in its first year had a turnover of R85000. It was moved to the Bark Mill manager’s house in 1963.

Turnover in 1965 reached R223 000 and a manager was appointed. Due to increased business it was decided to build a new store in 1981, which was completed in 1982.

The turnover achieved in 2000 was R50 400 000. The one staff member of 1965 had grown to 10 by 1985 and to 22 split between the division’s two branches at Dalton and at Kranskop by the year 2000.

In 1979 Co-op purchased a farm in the Kranskop area called Thulini. The farm is 1545 Ha. On which both sugar and timber are grown.

In August 1984 Co-op purchased the estate Harden Heights Wattle Co (Pty) Ltd. An estate of some 5000 acres. Harden heights Wattle Company was set up in 1902 and passed through several hands until eventually it was purchased lock, stock and barrel by the Co-op. The acquisition has proved to be an excellent one, which has subsequently made significant contributions towards the profits of the Co-op.

In September 1984 Co-op resolved a problem of lack of Extract quota by purchasing Comec Mimosa Extract Company. Before the purchase of Comec union Co-op had an extract production quota of 12,225% of the total industry; with Comec it went to 29,225%.

At the 1988 Annual General Meeting, held on 21 July, chairman Roland Meyer paid special tribute to Bobby Wittig who had decide to retire after a total of 16 years service to co-op as both an observer and director, 1972 – 1988.

In 1988 Co-op decided to provide an outlet for its members who grow maize and in a two pronged attack purchased Umvoti Mills in Greytown, for its product name and built a 4 and a half ton Maize Mill in Dalton.

In 1988 Co-op purchased Seven Oaks Sawmills in order to be able to process the pine saw logs that its members wished to sell.

Members and guests attending the 1989 Annual General Meeting on 20 July were saddened by the death, just a week earlier, of one of the founding fathers of the Co-op, - Mr. Heinie Kusel. He was 95 years of age.

In August 1990 Co-op purchased a 1545 ha. estate, Sunnyside, which produces cane and timber. Due to the security situation and the rate of crime escalating in the country the Co-op developed the security division in 1992. The main function of this division is the safe packaging and delivery of farm payrolls.

Although originally developed to service the Co-op’s farms, this division has expanded into a large operation utilized by a number of farmers in the area.

At the 1993 Annual General Meeting Vice Chairman Walter Kusel announced his retirement and Ed Wittig was appointed the new vice-chairman.

In order to achieve vertical integration the Co-op established, in 1993, an added value plant in the form of a knock down furniture factory for its members pine saw logs. This plant was established in the old Comec factory at Schroeders and is called Midlands Pine Products (Pty) Ltd.

During 1995 Union Co-op built and commissioned a new training centre and also erected new management houses on Sunnyside farm.

In 1997 a new building was designed and built to house all the Co-op’s accounting functions. All functions and staff were moved with the minimum of disruption.

In 1996 another improvement to the factory was developed with the design and commissioning of the rock removal plant. This system goes a long way to helping the clean cane campaign. In 1998 a new enterprise was started using chips and sawdust from the sawmill operation to extrude a final fuel product that can replace charcoal or coal. The product is extremely eco-friendly which should provide a positive factor assisting export marketing.

Also during the year the sawmill was upgraded to increase productivity and reduce costs. The 1999 Annual general Meeting of the Co-op, held on 22nd July, marked a memorable high point in the history of this community developed and driven institution – the 75th anniversary.

At the meeting the chairman, Roly Meyer, could report with pride that the past seasons results had come to the 75th anniversary party by reflecting a record level of profits for the Co-op.

Also during the year two of the Co-op’s operations, The Midlands Pine products and Harden Heights had both received their Forestry Stewardship Council Registration. The registration is granted in recognition for the production of totally natural and environmentally friendly products.

Another feature of the 1999 AGM was the tribute paid by chairman, Roly Meyer, to the 42 years of unbroken service given to Co-op by Friedhold Klipp in the various capacities as observer, director and vice-chairman. Mr. Klipp announced his retirement.

The season 1999/2000 was characterized by many difficulties with all commodity prices depressed and margins under extreme pressure. Nevertheless all divisions with the exception of one, succeeded in posting surpluses for the season.

The briquette plant was beset with unwanted problems with the marketing company with which the Co-op had an agreement reneging on its part of the agreement. This has forced the Co-op to enter the unwanted waters of trade mark development, designs for packaging and marketing which should have been undertaken by the marketing company.

The General Manger, Tony Charlton, comments on what has, and what will be, achieved by this community driven “family of farmers” in the years ahead:-
“An asset hugely important to its members has been forged in the Union Co-operative Ltd. For the future generations the marketing of their raw materials is assured, thus removing one of the greatest concerns in agriculture. From the sound base that has been built over 75 years the Co-op will continue to grow, expand and diversify to meet the needs of its members. The dedication of the board of directors, the staff and the members will ensure the way forward yields the results required. What will never be lost sight of is the original purpose for which the co-operative was formed which accords with the principles of the original pioneers of the co-operative movement in Rochdale in 1840.”

“This co-operative will continue for the members, and with the members, to greater heights in the future.”