Rural Find

Wool companies seek to merge

In November, wool producers will vote on the proposed merger of producer-owned export and marketing company Wools of New Zealand (WNZ) and Primary Wool Co-operative to form a fully integrated supply chain business.

Some 2,100 farmers are expected to vote in favour of the deal. Ahead of the vote, Primary Wool Co-operative will become 100% -owner of CP Wool after buying Carrfields Ltd’s 50% stake.

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Carrfields will focus on specialist wool and hemp products through its controlling interest in the NZ Natural Fibers business along with Hemp New Zealand and other minority shareholders.

“The moves are the result of year-long negotiations between Carrfields Ltd, Primary Wool Co-operative and WNZ, which together handle 37% of New Zealand’s wool shearing,” says James Parsons, chairman of WNZ.

“Producers have been demanding consolidation and now they will have a voice. Together we will be able to realise the vision and scale needed to make a real difference in New Zealand’s heavy wool industry.”

Primary Wool Cooperative and CP Wool director Richard Young says the proposed merger marks the beginning of an exciting chapter for the wool sector. He believes it will serve as a launching pad for New Zealand to realise the full potential of wool.

“The proposed combined business will allow both businesses to realise their potential as a single farmer-owned enterprise,” adds Young.

“For CP Wool suppliers, it will be a link to closer interaction with customers through Wools of NZ’s market-driven strategy. For New Zealand wool producers, CP Wool will present an engine with more bales and a network of shops that implements this strategy.”

He says the board of the New Zealand Primary Wool and Wool Cooperative has been working since late last year to respond to consolidation demands from producers and develop a strategy to increase wool sales and prices.

“The consolidated organisation’s strategy will be underpinned by a shift from wool as raw material to farmer-owned wool products and branded consumer wool products.

“Ultimately, the development of an integrated supply chain is aimed at improving profits for our producers.”

Craig Carr, managing director of Carrfields and chairman of CP Wool, says the wool industry needs leadership, investment and strategic focus to ensure better outcomes for long-term contributors.

“Carrfields has decided that supporting the coming together of the two producer organisations and turning our attention to investing in the future development of wool and hemp products makes strategic sense.

“In the current fast-changing environment, we want to step up our activities with NZ Natural Fibers and there are a number of exciting opportunities in front of us.

“In addition, Carrfields will continue to work with our international brand partners in its ongoing drive to develop new wool markets.”

Producers will be able to find out more at a nationwide roadshow starting in early August.

Shaping

Primary Wool Co-operative Limited was founded in 1974 by a group of Hawkes Bay farmers to increase profits for wool producers. In the following decades, its membership grew to over 1,400 people across New Zealand.

Wools of New Zealand is a 100% New Zealand supply, sales and export marketing company, with 730 producer shareholders representing some 14.5 million kilograms of annual durable wool production.