Elders seeks wool for new US supply

Wool growers will receive contract details in the next six weeks from Elders Primary Wool, which has announced the final details of its new supply arrangement with United States carpet retailer CCA Global Partners.

Elders Primary Wool and its subsidiary Wool Marketing Enterprises has launched its Just Shorn brand, which can be linked to relationship branding and promotion with CCA Global Partners in the US, together with New Zealand Romney and Perendale sheep breeders.

Elders Rural Holdings managing director Stuart Chapman said farmers would be contracted to supply wool to exacting specifications and, while he would not reveal prices, he said the premium would be large enough to encourage supply.

"We are not afraid of where we need to be," he said in an interview.

The announcement has provided a badly needed injection of good news for the beleaguered wool industry, and also provided some badly needed promotion in the key carpet market of the United States.

Mr Chapman said the deal also played on the fibre's strengths of being natural, environmentally friendly, sustainable and of high quality - attributes research had shown him had never been fully exploited.

"People don't understand its virtues or benefits and I wonder if they ever did.

"So many people we talk to about wool don't understand its values and, in a lot of cases, the perception of what happens once a sheep is shorn is quite wrong. Some think sheep die once they have been shorn."

Mr Chapman said the reaction from farmers to the launch of the US-developed Just Shorn brand and contracted supply, had been overwhelming.

"People are desperate and a lot of people are still very passionate about wool, but they have lost their confidence becauseof the low returns."

The message he received was that if the returns were there, wool growers would once again put in the effort to produce a quality product.

Contracted suppliers were required to have their farms and wool sheds accredited by Elders and to supply wool to specifications at a predetermined monthly timetable.

The contracts would be staged, with the initial offering to prepare samples but volumes growing in hand with stocks of carpet and demand.

Working with the Romney and Perendale breed societies gave them an opportunity to differentiate their wool by branding it as Just Shorn Romney Carpet or Just Shorn Perendale Carpet.

"We see it as an opportunity to assist the breeds to encourage people to breed more of these types of sheep," he said.

Elders would oversee the supply and manufacturing and CCA the retailing.

While the US was in recession, Mr Chapman said woollen carpets would be targeted at affluent consumers, a sector of the market largely immune from the recession and increasingly conscious about the environmental impact of their purchases.

Targeting this segment of the market also meant the company's promotional dollar would not be spread too thinly.

Wool had just 2% of the US carpet market, and if that was grown to 3%, Mr Chapman said it would more than soak up New Zealand's carpet wool clip.

Europe was also on the company's radar, but the recession has seen much of Europe's carpet mills close.

Virginia-based CCA was founded as a retail store in 1972 but the co-operative has grown, developing 14 independent business brands in 3600 locations throughout the US.