Fine wool growers have commited to controlling their product with the purchase of the 50% shareholding of NZ Merino, owned by PGGWrightson.
The merino wool marketing story is seen by many as a model for the coarse wool sector, and its expansion into mid micron wool will be watched with interest. The Icebreaker, Snowy Peak and Smartwool brands are synonomous with the quality attributes merino wool grows, and lift this product away from just another commodity product.
To get 630 merino fine wool, independent, high country farmers to agree on a joint marketing initiative is a significant achievement, and coarse wool operators should look at what they have achieved, and display similar unity to achieve improved returns.
NZ Merino Company will seek to widen its shareholder base from just fine-wool growers reports Stuff. The move is to follow PGG Wrightson's conditional sale of its 50 per cent shareholding in NZ Merino Company to Merino Grower Investments Ltd .The $7.62 million sale will put 100 per cent of the fine-wool marketing company in the hands of its grower shareholders.
The purchase price was based on an independent valuation prepared by PricewaterhouseCoopers on behalf of both PGG Wrightson and MGIL.MGIL chairman Bob Brown said the grower company would seek approval to alter its constitution to allow a broader farmer ownership of the merino company, including the farmers of mid-micron "merino-cross" wool sheep.NZ Merino was already "dealing with a lot of mid-micron wool at this point and we believe if we allow some ownership to go to mid-micron growers as well, that we'll broaden the whole base of the company".
Employees, including senior managers, would also be allowed to become shareholders under the changes to be voted on, he said."We're still very much going to have a commercial focus. We have no intention of turning it into a co-operative ... [managers] had a notional shareholding.NZ Merino's ownership was already based on about 630 merino fine-wool farmers and that number potentially could be doubled given the number in the mid-micron market.
PGG Wrightson managing director George Gould said though his firm was taking a wider review of its own portfolio of businesses, the sale of the stake was a one-off and not directly related to that review. Brown said the aim was to lift merino fibre out of the commodity basket, and differentiate the fibre to target the highest end of the international apparel market.Its NZ customers now include Icebreaker and Snowy Peak, while overseas they include Cariaggi, Ibex, John Smedley and SmartWool.
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