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Forward contracts could increase woolgrower return

News Release
Forward contracts could increase woolgrower returns between $15 and $30 per bale

Woolgrowers consigning their wool to the new forward contract initiative introduced last year by New Zealand Wool Services International Limited (WSI) will benefit from a premium of between $15 and $30 per bale, says the company.

WSI managing director Michael Dwyer said growers would be well-advised to sign up to the Purelana branded scheme for the upcoming season.

“Based on detailed independently undertaken analysis, we are confident that growers under contract to us could be better off by up to $30 per bale compared to other methods of selling their wool.

“We are able to provide these benefits through the critical mass of the wool we process, which enables us to minimise freight, handling and commission costs that are associated with other methods of selling wool,” he said.

According to Michael Dwyer, WSI developed the Purelana brand to market quality New Zealand scoured wool.

“The initiative was given a limited introduction last year. We are now extending it to all woolgrowers, particularly those who are also our shareholders.

“In developing the Purelana brand, we worked extensively with motivated individual growers to ensure the marketing advantages from Purelana are returned to growers, and benefit the wider wool industry in New Zealand long term.

“The Purelana initiative is based on the direct supply of wool from woolgrowers to WSI under exclusive contract.

“In 2007 we trialled the Purelana brand with a limited selection of woolgrowers. Response was very encouraging. Accordingly, we are now processing an increasing percentage of directly procured wool through our two scours. We anticipate this growth trend will continue markedly next season,” he said.

Michael Dwyer said the aim of the brand is to shorten the chain between New Zealand woolgrowers and the end users of their product.

“The Purelana brand seeks to use the advantages of our world-leading scouring technology and its associated quality assurance, to add value to New Zealand scoured wool by enabling manufacturers and end consumers to trace the origin of their product right back to the grower.

“As a company that processes approximately 40 per cent of New Zealand’s crossbred wool clip for export to over 30 countries, we are uniquely well-positioned to achieve that aim. New Zealand woolgrowers make up the majority of our shareholders. They will benefit from this, as both suppliers of wool and shareholders of the company,” he said.

WSI is the only New Zealand wool exporter that processes its own wool. It owns and operates wool scours at Whakatu in Hawkes Bay and at Kaputone north of Christchurch. These two scours have a combined processing capacity of 400,000 bales of wool per year.


ENDS

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