Wednesday, April 24, 2024

Vote could change wool’s future

Neal Wallace
A proposed shakeup of entities that handle more than a third of New Zealand’s crossbred wool clip, is being hailed as a once-in-a-lifetime opportunity to rationalise the industry.
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About 2100 farmers will vote in November on a proposed merger between grower-owned export and marketing company Wools of NZ (WNZ) and Primary Wool Co-operative (PWC) to form a fully integrated supply chain business.

Ahead of the vote, PWC will become the 100% owner of CP Wool with the purchase of Carrfields 50% shareholding.

“These strategic moves are the outcome of year-long talks between Carrfields Ltd, Primary Wool Co-operative and WNZ, which collectively handle 37% of New Zealand’s wool clip,” WNZ chair James Parsons said.

By bringing together the strengths of individual companies and shortening the supply chain, Parsons is confident a merger will grow demand and prices.

“We will be increasing scale and the fact we are not competing at the farm gate and one entity will be selling instead of two means we can invest in more demand generating activities,” he said.

A key plank is WNZ’s strategy of linking consumers with branded woollen products, such as working with manufacturers to produce carpet that is competitively priced with synthetic, to appeal to environmentally-aware buyers.

“Essentially rather than sell crossbred wool as an ingredient, we want to take control and do it,” he said.

He estimates 40,000 bales are sitting in sheds unsold and depressing the market, which this new entity could mop up through increasing demand and ultimately improving prices.

PWC chair and a director of CP Wool Richard Young says the proposed merger marks the start of a new chapter for the wool sector.

“For CP Wool suppliers it will be the link to greater customer intimacy via the Wools NZ market-focused strategy,” Young said.

“For WNZ growers, CP Wool will bring the engine with its large bale numbers and network of stores that allows that strategy to come to life.

Carrfields managing director and CP Wool chair Craig Carr says the wool industry needs leadership, investment and a strategic focus.

“Carrfields has decided that supporting the joining together of the two grower organisations and turning our attention to investing in the future development of wool and hemp products makes good sense strategically,” Carr said.

A nationwide roadshow on the proposal starts early next month.

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