Wool Growers Opting Out Of Wool Partners

30 November 2010

Wool Growers Opting Out Of Wool Partners

Private wool merchants and independent wool brokers have won over "significant new business" since the launch of the Wool Partners Co-operative prospectus to raise $65 million.

Wool Partners Co-operative has to claim 50 percent of the New Zealand strong wool clip to raise $65 million, but this week its directors said they needed more time and will now close the offer eight days before Christmas.

Wool Partners International have around 28 percent of all greasy wool sold at auction and will need to win about another 22 percent of new business from other woolbrokers and private merchants to be able to get their capital raising to $65 million and successfully complete the float. But the trend seems to be going in the other direction.

The president of the New Zealand Woolbrokers Association, Hawke's Bay-based Philippa Wright from Country Wool Auctions says she has lost one client since the prospectus was launched, but has a net gain in business with three decent sized new clients abandoning Wool Partners and coming on board with her company.

Ms Wright said farmers were worried about a lack of financial information in the prospectus and did not like the thought of their clip being committed to an unproven organisation for five years. She said the float had been good for the wool industry as farmers were asking to be more informed about the world markets and what happens to their wool after the fall of the auction hammer.

"No-one really thinks the Wool Partners Co-operative will get off the ground and while its failure would disappoint the promoters, it won't be a disaster for the wool industry. The wool marketing will continue to operate successfully through the existing channels where improved demand is already flowing back to growers' pockets.

"The industry is already united and funding international promotions initiatives such as the HRH Prince Charles Campaign for Wool through the National Council of New Zealand Wool Interests (Natco)," she said.

Peter Whiteman from Masurel Direct and also one of New Zealand's larger wool exporters, said his private buying business had grown 30 percent and his client base had steadily increased since they launched their new options for growers two years ago.

"More recently we have seen a spike in new business with a number of large Hawke's Bay and Wairarapa wool clips, moving across from Wool Partners International since the prospectus was launched in October.

"There's definitely an appetite from woolgrowers to learn more about what's happening down the supply chain and as an exporter we are able to give direct feedback to our clients on the market signals, where there wool ends up and what they need to do to achieve better returns."

Mr Whiteman said campaigns such as the Prince Charles inspired Campaign for Wool, which had been shunned by Wool Partners who refused to participate, were part of a global co-operation from wool growing countries to promote wool as a superior and sustainable fibre compared to synthetics.

President of the Private Wool Merchants Federation, Shaun Ryan said about 50 percent of the strong wool clip was bought direct from the farm, and his members were reporting an overall increase in new business from former Wool Partners International clients.

"In some areas our members have reported some very large clips with a long history with Wrightson or PGG moving away from Wool Partners International."

Council for Wool Exporters president John Dawson, from Wool Services, said the Wool Partners extension of time on the prospectus would continue to add an element of uncertainty to the international wool markets and it was in everyone's interest to get the situation resolved so the industry could move on.

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