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Strong Wool Growers Business Proposal

Strong Wool Growers Take Business Proposal To Industry

Representatives of strong wool growers are putting an improved business proposal to the wool industry.

“The establishment group that formed last week, following a meeting of growers and industry, has built on past work to the point where we can now put a proposal to prospective industry partners,” said Sir Brian Lochore, who chairs the group.

“We are going to the industry with our proposal for new supply aggregation initiatives over the next week or so. We are back to square one in talking to the industry and currently have no preferred partners.

“However, we are building on work already done in this area and moving forward with it.”

These talks follow the collapse of an earlier strong wool marketing concept that was sponsored by the New Zealand Wool Board as a result of recommendations in the McKinsey report to wool growers on improving profitability, which was issued in June last year.

“Our proposal is to establish a grower-controlled procurement and supply entity that negotiates arrangements between industry players, rather than a ‘bricks and mortar’-type organisation, which would require a lot of capital."

Sir Brian says there are significant supply chain efficiencies that could be gained by having an integrating organisation that co-ordinates procurement and supply.

“The situation is urgent, and we are pressing forward with talks.

“There’s no doubt this is a complex situation and will require some hard decisions by some people in the industry, including growers and grower representatives. However, lack of profitability is an issue all industry players are grappling with – not just wool growers.”

Sir Brian says the group intends to create strong commercial arrangements.

The original group of seven has expanded to include David Giddings, representing Romney New Zealand. A smaller working group headed by Edwyn Kight and including Andrew Fox and Chris Kelly is responsible for taking the proposal to industry.

[ends]

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