Plans For National Woolgrower Co-Op Being Formulat
Representatives of strong wool growers say they are now formulating detailed plans for a grower-owned national wool supply co-operative.
Grower group representative, Ed Kight, says the organisation would procure wool from farmers and co-ordinate supply.
The ownership structure would be similar to meat export co-operatives, but would not involve 'bricks and mortar'.
"Growers would be asked to invest in the organisation, which would reward their investment with rebates, dividends and on-shore logistical efficiencies," Ed Kight said.
"Their wool would be handled by existing service providers and exporters, who would assume ownership much as they do today.
"The delivery of on-shore procurement would be contestable, and selected exporters would compete to buy the wool."
Ed Kight says the group has a well-developed plan for a grower-owned and controlled procurement organisation and is now 'doing the numbers'.
It will take a business case to the McKinsey Report Implementation Project Team around the end of this month.
"Once the IPT and the Wool Board have given us the go-ahead, we will take the proposal to strong wool growers around the country. To get the economies of scale and to influence the way wool is traded, a substantial proportion of commercial wool growers will need to come onboard and commit supply.
"The excess capacity in the supply chain makes wool trading and processing in New Zealand inefficient. The people we have spoken to in the industry can mostly see the benefits of our proposal.
"There is a groundswell of farmers who are frustrated with the current system. We believe they will also share our vision for a new procurement system that creates efficiencies on-shore and removes many of the anomalies associated with the way much of wool is traded."