In the 1800s and well into the early 1900s most industries were characterised by many small firms. Large, vertically-integrated operations were the exception to the rule. They tended to occur in industries with large capital requirements. For example Ross and Glendining was a textile manufacturer that arose over the 1880s and 1890s in Dunedin. It exploited the early supply of wool. By 1900 it employed 1,000 people which would have made it the largest manufacturing company in the country. By this time it owned sheep runs, wool sorting and scouring operations, a coal mine, woollen and worsted mills, and hosiery and clothing factories. Its distribution network included an office in London and branch warehouses in major New Zealand cities.
Other major companies of the late 1800s were the New Zealand Sugar Company, Auckland Gas, the New Zealand Frozen Meat Company and the Northern Steamship Company – all of which had capital ranging from £150,000 to £300,000 ($25–50 million in 2009 terms).
Access to capital
Companies with access to capital could grow. They generally fell into three categories. The first was companies who through location or family connections had access to investors. For example the Mosgiel Woollen Factory Company which grew in the 1870s had connections to wealthy Dunedin families.
The second category was companies that promised to be large enough to attract the attention of domestic promoters. For example the Kauri Timber Company (the largest of the colonially floated companies of the 1880s) grew out of many existing firms. Company promoters were attracted to the timber and sawmilling industry by the profitability of the Union Sash Company, which had formed in the 1870s.
The third category was companies who, owing to the nature of their business, were able to attract foreign capital. For example the Union Steam Ship Company took off once it attracted Scottish capital in the 1870s – helped out by the fact that it bought its ships (with a mix of cash and shares) from one of the Scottish investors. Companies who were in situations or industries that could not attract capital struggled to grow.
In the early 2000s companies such as Telecom and Fletchers were household names. A century earlier the Mosgiel Woollen Factory, the Kauri Timber Company, Union Steam Ship, the Waihi Goldmining Company and Christchurch Meat were similarly all household names.
Shipping companies had large capital requirements. The New Zealand Shipping Company registered in Christchurch in 1873 with a nominal capital of £250,000 ($30 million in 2009 terms). The need to buy ships soon saw it looking to Britain for further capital, a pattern of development mirrored by the Union Steam Ship Company which began in Dunedin in 1875 as a coastal shipping company. With a capital injection from Britain it rapidly expanded into the trans-Tasman trade. It was bought by P & O in 1917. For about half of its existence the Union Steam Ship Company was the largest private employer in the country. As late as 1972 it had over 3,000 employees.