Wrightson, Tasman Velvet start marketing company
Dec. 4 - PGG Wrightson, New Zealand’s biggest rural services company, and Tasman Velvet Processors agreed to set up a joint venture to market the deer product into key markets in Asia.
New Zealand Velvet Marketing Co. will market about two-thirds of New Zealand’s velvet sales into China and South Korea, where it is used as a medicinal tonic in traditional therapies.
A combined marketing effort was thrown into doubt when deer velvet cooperative Velexco withdrew from negotiations.
“Producers have been galvanised by low velvet prices in recent years to create structure to drive industry reform,” Chris Taylor, director of Tasman Velvet, said in a statement. “The key element missing has been a link to a proven marketing company.”
The new company will mirror marketing developments in other rural products, such as the fine wool industry. Wrightson this year attempted to create a more coordinated marketing effort for meat via an investment in Silver Fern Farms, a deal that was thwarted by the meltdown in global financial markets.
Ownership of New Zealand Velvet Marketing will be split between Wrightson, Tasman Velvet and farmers. Wrightson shares fell about 2% to NZ$1.50 and have tumbled almost 45% in the past three months.