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New PGP programme sets sights on strong wool

New Primary Growth Partnership programme sets sights on strong wool

Date: 10 Feb 2016

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector—a partnership that could see an additional $335 million contribution towards New Zealand's economy by 2025.

"'Wool Unleashed', or W3, is a new 7-year, $22.1 million Primary Growth Partnership (PGP) programme led by NZM that will derive greater value from New Zealand's strong wool," says Justine Gilliland, Director Investment Programmes at the Ministry for Primary Industries.

"This programme aims to deliver long-term economic benefits by securing a premium for New Zealand strong wool, increasing on-shore processing, and lifting the returns of the strong wool sector overall.

"The PGP is at the forefront of boosting the value, productivity, profitability and sustainability of our primary industries, and W3 represents these same core values. This programme has the potential to deliver significant benefits and transformation for the strong wool industry to capture value through the eyes of the consumer and respond to the declining profitability and volume trends.

"The PGP and those involved are committed to New Zealand's long term, sustainable economic growth, with MPI and industry committing approximately $746 million in 21 PGP programmes over time."

MPI and NZM have signed a contract so the W3 programme can formally begin.

NZM Chief Executive John Brakenridge says W3 will apply NZM's experience with fine and mid-micron wool in establishing contracts with premium brand partners and developing new uses and markets to strong wool.

"We've already had considerable success in these areas through the New Zealand Sheep Industry Transformation Project (NZSTX), our first PGP programme, which is focused on fine and mid-micron wool and is due to wrap-up in 2017.

"NZSTX was about using product differentiation to generate better grower returns for fine wool fibre, meat and other products, and production science projects in genetics, animal health and forage production.

"We'll be looking to build on our success in NZSTX to date by turning our attention to the strong wool industry and drive increases in profitability across the value chain."

Mr Brakenridge says the programme will be delivered through four work streams.

"The first, Social License to Operate, is about reviewing and improving on-farm production practices to respond to high-end consumer preferences, such as traceability, low chemical use and quality standards," he says.

"The next work stream, Crossing the Chasm – Commodity to Branded Experience is about developing and implementing a system that connects producers with markets. This will enable producers to respond to market preferences.

"Another work stream, Blue Ocean – Market Driven New Uses and Users for Strong Wool,is about identifying and developing new wool products for niche markets through a collaborative effort with growers, research providers and market partners.

"The long-term sustainability of the strong wool sector may require a transition to non-traditional uses of wool, and market drivers identified by this work stream will guide our direction and new product development.

"The final work stream is called Primary Sector Extension. This will involve collaborating across the primary sector to deliver cross-sector shared knowledge and practices."

Ms Gilliland says the W3 programme will work with other industry organisations to improve practices across the sheep industry.

"Driving collaboration across sectors is an important and valuable part of PGP programmes," she says.

"Wool has been an integral part of New Zealand's farming systems, with many farmers either solely farming sheep or farming them in combination with other animals. This programme will complement work currently being undertaken to improve returns for sheep meat, beef and venison to capture the best returns for New Zealand’s primary industries."

"In 10 years' time we want 40 percent of the strong wool bales transacted to be at sustainable prices with substantial premiums over long-term historic prices," says Mr Brakenridge.

"This is ambitious, but we believe it's achievable.

"The expected benefits from the W3 programme will create a strong foundation and path for future growth across the wool sector."

ENDS

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