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Woolgrower support for Purelana brand

Woolgrower support for Purelana brand

Woolgrowers have responded positively to the new forward contract initiative introduced in September by New Zealand Wool Services International Limited (WSI), the company reported at its Annual General Meeting in Auckland yesterday.

WSI managing director Michael Dwyer said growers have been eager to commit to supply their clip for use in the company's Purelana branded marketing of scoured wool.

"We have initially taken the Purelana forward contract to a select number of woolgrowers. Those we have approached are enthusiastic to take advantage of the long term benefits the scheme promises to deliver. We are now extending the invitation to a wider group of growers," he said.

According to Michael Dwyer, ongoing contract discussions with selected farmers throughout the country should result in substantial volumes being committed to Purelana forward contracts prior to Christmas.

"Several large producers have signed contracts so far, and we have already begun processing their wool at the WSI Whakatu scour in Hawkes Bay. Other significant growers, in both islands, have indicated they will sign in the next few weeks.

"Initially we targeted a minimum annual volume from each participant. Now that trial period has proven successful, we will extend the opportunity to participate to more woolgrowers. Based on feedback to date, the success of the scheme is generating widespread interest," he said.

In return for a commitment to supply their whole clip exclusively to WSI for three years, the Purelana forward contract gives woolgrowers budgeting guarantees and certainty of price. A split payment regime spreads cash flow for both seller and buyer. When combined with premium payments, this gives the grower an additional buffer against market movements.

Michael Dwyer said the Purelana brand, based on the forward contract initiative, was developed to raise the international profile of New Zealand scoured wool, therefore lifting sustainable returns to woolgrowers.

"This is the first time a direct supply agreement for coarse wools has been initiated by a wool processor and exporting company. We have spent considerable time and effort refining the details. This initiative is robust, commercial, and able to withstand market realities.

"A trade-marked concept for New Zealand carpet wools will capture better returns for growers, as well as providing customers with significant processing and marketing benefits.

"Guaranteed commitment from woolgrowers enables WSI, through the Purelana brand, to strengthen its competitive position in the international marketplace, which we believe will assist prices to recover over a period. Growers will, of course, share in the increased returns," he said.

WSI has also produced a promotional DVD, which was launched at its AGM, to promote Purelana to customers worldwide.

WSI currently markets a major percentage of New Zealand's coarse wool clip to clients in over 30 countries.


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