Wools of New Zealand chairman Mark Shadbolt says the
industry has to get out of the "bargain-basement price
bracket". Photo supplied.
Returns of $3/kg for strong wool are unsustainable, both
for farmers and the sheep industry - and it is up to farmers to
change the situation, Wools of New Zealand chairman Mark
Mr Shadbolt was addressing a road show in Waimate yesterday,
where he outlined the sales and marketing company's
Strong wool growers have been asked to subscribe for shares
at a ratio of one share for every 2kg of their annual strong
wool production, with a minimum subscription of 5000 shares
at $1 per share.
The company's objective was to raise $10 million, although
the offer would proceed with a minimum of $5 million. The
offer closes at 5pm on December 14.
Mr Shadbolt, a Banks Peninsula farmer, described it as an
Strong wool growers faced volatility in the market
year-on-year and were "pretty bitter and twisted" about their
The capital-raising was an opportunity to look forward,
rather than back, and he believed that with patience,
investment and commitment, rewards would finally be reaped.
"If we don't sort this problem out in the wool industry
ourselves, and it will only be us that can do it, nobody else
has an interest in the price of wool going up to us as
growers. It is up to us.
"Unless we do that, unless we have sheep industry
profitability, we'll continue to see the dairy conversions
and the forestry blocks that are happening all around us," he
New Zealand produced the best crossbred wool in the world and
it had a reputation for producing strong, white, bright
Wool comprised only 2% of all flooring in the total global
market and while New Zealand produced 30% of crossbred fibre
and was influential in that market, in real terms it was only
0.6% of all flooring.
New Zealand should not be selling wool as a commodity, where
poorer wool and synthetic substitutes were the competitors;
rather, it needed to focus on markets outside of that
"bargain-basement price bracket".
Those high-value market segments included cruise ships, the
aircraft industry and luxury hotels and apartments.
"At the moment, we push our wool out the gate and hope like
hell somebody will buy it for a price. That's not a way to
sell a product.
"We've got to work with the consumer in the market and
develop a full strategy pulling it through and most
importantly ... working with the current supply chain," Mr
It was going to be an evolutionary shift from commodity sales
to branded sales, resulting in longer-term stable prices,
while matching customer contracts to growers.
The vision was to be the leading innovative sales and
marketing company for New Zealand strong wool, while the
mission was to progressively improve the profitability of
Those behind the drive were under no illusions that it would
take time to build it into a commercial model, he said.
He believed $6/kg had to be the base price, which could then
be grown incrementally while the industry worked with the
customers in the market.
While there were some risks, Mr Shadbolt said if nothing was
done growers would get what they had alway got - $3kg - and
that was "not sustainable for any one of us in the farming
industry, and certainly not sustainable for the sheep
Farmers, who were the only ones that could change that,
should be excited about the opportunity and he warned he did
not think they would get another chance.
Lessons had been learned from the unsuccessful Wool Partners
capital-raising and it was now realised that it was not the
There was a lot of apathy among strong-wool growers and there
was also a lot of concern around the sheep industry, because
of wool and lamb prices. A lot of people had "folded their
arms", but it was time to do something.
Wools of New Zealand director Phil Guscott said the sheep
industry could not continue to be a competitive land use if
it relied on one product - meat.
Wool had to "pull its weight", yet it had become "almost
irrelevant" to a lot of farmers.
"If we don't do anything about it, it will remain where it
is," Mr Guscott said.