Marketing aims to help wool trade

Wool Industry Network CEO Mike Jones says details of the structure will be finalised later this...
Wool Industry Network CEO Mike Jones says details of the structure will be finalised later this year. Photo by Neal Wallace.
It could be another year before wool growers see changes to the way wool is marketed.

But last week's announcement that PGG Wrightson is to include the majority of its wool business with the new grower's co-operative, Wool Grower Holdings, was a key step in turning around the fortunes of the $1 billion industry and repositioning the fibre.

Wool Industry Network (Win) chief executive Mike Jones said establishing Wool Grower Holdings (WGH) would help unify the industry and consolidate the clip.

The key now was encouraging growers to support it.

Mr Jones said in an interview that details of the marketing structure had been worked on, and they would be finalised later this year with a view of launching it early next year.

The marketing structure would revolve around a brand and involve the creation of a sales and marketing desk.

Win has been charged with turning around the fortunes of the ailing wool industry and has come up with a formula that resembles New Zealand Merino, Fonterra and the failed meat mega merger, in that it aims to unite growers to add value through marketing power and branding and improve bargaining power.

"There is value in the marketplace without question, but it requires that we have a structure and organisation,"Mr Jones said.

Crossbred wool has been a niche product traded through a commodity value chain, he said.

"We need to be thinking of wool as a niche product and going out and marketing it as such."

The changes would see strong wool branded and marketing which differentiated it from other fibres and wool.

Mr Jones said global concern about climate change was timely for crossbred wool.

"With the push to protect the environment for the future, our New Zealand-grown wool is a prime product to be selling to discerning buyers internationally who are looking to buy high quality, 100% pure New Zealand wool."

Previous attempts to revitalise the industry and grow the fibre's contribution to the industry had failed, but Mr Jones said he was confident this model would work.

In the deal announced last week the new entity, to be known as The Wool Company, would be 60% owned by WGH and 40% by PGG Wrightson, depending on participation by other organisations.

The Wool Company would buy PGG Wrightson's wool handling operations for $46 million, of which $10 million would be paid in cash on settlement with the remainder a mixture of debt and equity in the new entity.

It excludes PGG Wrightson's shareholding in the New Zealand Merino Company but includes wool exporter Bloch and Behrens, bought by the listed rural servicing company last week.

The Wool Company will invest in value-added initiatives in the areas of marketing, sales and distribution along with research and development and it will seek support from all wool growers and industry participants.

Mr Jones said the agreement should be finalised on June 30 and business start in July.

 

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