Wools of New Zealand (WONZ) and Primary Wool Co-operative (PWC) have committed to work together with formal discussions under way on how to combine operations in a way that will rejuvenate NZ’s languishing strong wool sector.
WONZ chair James Parsons said the wool industry must collaborate to get a better financial result for farmers.
He said bringing together two like-minded grower organisations will be an important first step in rejuvenating the current dire economic plight of wool.
“This gives us the critical mass to deliver on our vision, provides functional benefits, and importantly, the scale to pick up strategic commercial projects that we hope will emanate from the Government’s wool industry vision and action strategy,” Parsons said.
“Having more than 2000 passionate sheep farmers under one umbrella and building a stronger entity to represent those farmer interests will provide the combined scale required to make a difference for NZ’s sheep industry.
“Our goal is to capture more value by building stronger more direct relationships with customers and consumers.”
Parsons said WONZ has been doing this, but it has never had the scale to turn the dial.
Combining with PWC, representing its 1400 farmer shareholders and its 50% ownership of Carrfields Primary Wool (CP Wool), will achieve the necessary scale.
“It will mean we can reinvent the supply chain and improve efficiencies, enabled by the increased volume, brands and exporting focus WONZ brings to the table,” he said.
PWC chair Hamish de Lautour said the collaboration will help position wool where it belongs.
“If wool is to capitalise on its rightful place as the sustainable fibre of choice for consumers, the stronger entity must focus on marketing and extracting value from products made of wool and not just trading wool as a commodity,” he said.
“Both PWC through CP Wool and its subsidiaries and WONZ have been developing similar strategies and doing that jointly makes real sense.”
PWC, in its joint venture with Carrfields, has invested significantly in the Just Shorn programme and the NZ Yarn spinning mill.
“Our view is WONZ has wide global connections and developed loyal direct contract supply to the likes of fabric manufacturer Camira and bedding manufacturer Enkev,” he said.
“WONZ and PWC shareholders have all got skin in the game and have invested cash to build their respective businesses.
“Working together, we are far better positioned to deliver for our grower shareholders, the sector and the country,” Lautour said.
Both entities envisage a lean simple commercial structure that delivers the opportunity for other grower groups and new grower shareholders to join.
“Due to the nature of the company structures, combining operations will take time but there is a strong commitment from WONZ and PWC that this is a prize worth pursuing,” Parsons said.
Past wool industry reports have called for the formation of a grower cooperative and marketing company and have consistently recommended the industry consolidate, get closer to the consumer, and invest in stronger marketing efforts.
“The great news is both these entities already exist so we must seize the initiative and make this happen,” he said.
“We are supportive of the goals of the Wool Industry Project Action Group and we’re keen to work with others in the industry to ensure a prosperous future for the sector.”
CP Wool chair Craig Carr is buoyed by the prospect of grower unity.
“There are lots of natural synergies with WONZ and PWC teaming up.
“Carrfields has a long-established relationship with PWC and look forward to the export and marketing function WONZ will bring as we implement some necessary changes in the sector,” Carr said.
Collectively, the shareholders of WONZ and PWC, together with farmers supplying PWC’s joint venture CP Wool, produce more than one-third of NZ’s entire strong wool clip.
PWC was formed in 1974 by a group of Hawke’s Bay farmers to increase the returns for wool growers. Membership has grown to more than 1400 right across NZ.
WONZ is a 100% NZ grower-owned supply, sales and export marketing company, with 730 grower shareholders representing 14.5 million kilograms of annual strong wool production.