With crossbred wool selling for its best prices for at least 5 years, the timing of this capital float is as good as it gets, for Wool Partners International.
A series of road shows will tour the country this month selling the proposal to farmers, and asking them to support a proposal to invest $1 a kg greasy of wool they supply in the new company.
With the coarse crossbred wool indicator $1.50 a kg clean ahead of the same stage last year, for many there will be funds to invest.
However there is still a division between Elders and Wool Partners, and for the future of this sector it is disappointing that a merger could not be arranged.
After years of proposals and soul searching this could be the last chance for significant reform in the wool industry, and the future will be in farmers hands.
Major players in the wool industry plan a $65 million capital raising to form a farmer-controlled co-operative – following in the footsteps of the Fonterra dairy co-operative model.The name Wool Partners Co-operative Ltd has been reserved at the Companies Office for an entity that will be 100 per cent farmer owned and marketing focused, backers say in Stuff.
The co-operative will essentially replace Wool Partners International as an entity representing farmers, and see the exit of 50 per cent stakeholder in WPI, listed farm services company PGG Wrightson. Mr Abercrombie said the co-operative was chasing as many of the country's 12,500 wool farmers as possible to join. "It's basically copying the Fonterra model, with the premise being that for us to effect change in this strong wool industry there's got to be strength in numbers.
Mr Grant, a farmer and a former National MP, will be the chairman of the newly formed Wool Partners Co-operative Ltd. Other directors will include Mark Shadbolt (a Banks Peninsula farmer), Keith Sutton, Theresa Gattung, John Perriam (of Bendigo Station and Shrek the sheep fame) and Sir Brian Lochore. Around 12,500 growers produce 130 million to 135 million kilograms a year and the co-operative is targeting about half of that.
"We're asking the growers for $1 for every kilo of greasy wool that they supply," Mr Abercrombie said. Part of that capital raising will be used to buy some of the WPI businesses including procurement, export and Wools of New Zealand marketing. Also, a $10m loan from PGGW to WGH needed to be repaid. PGGW will also buy a wool handling business from WPI.
Mr Grant said the talks around a co-operative structure had also involved Elders. "We have had a lot of road testing over a period of three or four months. The original proposal was to try to have one co-operative – that was to combine Elders Primary Wool and the proposed co-op that we're now looking at into one. But they rejected us on that option."
3 Comments
Elders certainly a problem child in more ways than one.
Jeff Grant has been around too long and too often to appeal.
Hopefully Theresa Gattung will have more sucess with wool fibres than fibre optics.
How ever I wish Wool Partners and Wool producers the best of everything.
you have to be joking I wouldn't make any money out of my wool what happend to all the money we have given for wool over the years
I agree we need a single seller got to get the buyers of wool back to the auction floor
fonterra know that the auction floor price reflects the true value of it's products
There was a time when wool buyers couldn't get there hands on very much fleece wool they got daggs dead wool and the scraps out of the shead now they pick up whole lines of fleece that is when a lot of the rot set in I know why wool has gone up a wool buyer told me today they couldn't supply enough wool to summet wool so they had to go to the auction floor and get it that is one of the reasions it has gone up.
Farmers need to stop supporting these wool buyers.There is getting less and less of it out there it will lift don't believe we need to reinvent the wheel to many jobs for old boys like Jeff Grant
Things starting to fire up for wool. Yesterdays auction was up another 10% on the last now up 50% since this time last year. Long way to go but things are going in the right direction surpriseingly quickly.
I think Abacrombie has been quite impressive so far and has the benifit of being from the outside.Its a pity about Elders but they lost alot of credability last year so maybe no loss. I agree with Brent that there are too many recycled faces.
Kunst, your a good man on the sustainability mantra, surely you will be a big supporter of all things wool? I hope your not a synthetics man being petro chemical in all!
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