NZM To Extend Marketing Model Into Mid-Micron

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NZM To Extend Marketing Model Into Mid-Micron

The New Zealand Merino Company (NZM) announced today that it has purchased the finer edge of the PGG Wrightson mid-micron business.

The purchase will extend NZM’s current market share from 85% of the national merino clip to include a significant market share of the mid-micron business.

In announcing the deal, NZM chief executive John Brakenridge said that the purchase will “complement the current business whilst not distracting from the core focus of adding value to the merino clip”.

“To date, NZM has been transacting a significant amount of mid-micron fibre when organising contracts for SmartWool – one of our larger brand partners who utilise both merino and mid-micron fibre – so this purchase was the logical next step in developing the NZM model.”

“There are a number of synergies between the merino and mid-micron businesses with a real opportunity to provide significant benefit for these grower groups,” says Mr. Brakenridge.

“The marketing and innovation of merino fibre will continue to be our core business and for merino growers and suppliers it will be business as usual; for mid-micron growers this is an opportunity to utilise NZM’s wool selling options, that have had significant success for many merino growers, and to make the most of the new resources that will be employed to champion mid-micron in the global market place.”

Mid-micron growers will be offered similar wool selling options currently offered to merino growers. “Mid-micron growers will be able to take advantage of forward contracts and the extended benefits offered through the established value-add route, or they can choose to maintain a low-cost selling option through the Auction Services model in Christchurch,” says Mr. Brakenridge.

NZM’s 50% shareholder Merino Grower Investments Limited (MGIL) has endorsed the mid-micron purchase as a strong strategic move. "MGIL is highly supportive of this move as it will provide further critical mass to the marketing and innovation initiatives of the company," says MGIL chairman Bob Brown.

The transaction has also been endorsed by the Chair of Wool Grower Holdings Limited, James Aitken. “We see this initiative as a logical extension of NZM’s success on behalf of merino growers, and as complementary to the programme for The Wool Company Limited in strong wools,” Mr. Aitken said.

PGG Wrightson recently announced their strong wool partnership with new growers’ co-operative Wool Grower Holdings Limited, formed by the Wool Industry Network, to form a newly established entity using the interim name The Wool Company Limited.

PGG Wrightson Wool general manager Kevin Winders said today that he was enthusiastic about what the mid-micron initiative would mean for mid-micron growers. “The sale of this part of our business to a leading wool marketing organisation is something for mid-micron growers to be very excited about; we are confident that they will see benefits from the relationship with NZM.”

“For our company, the sale of this part of the business allows us to concentrate on raising the profile of the strong wool industry and improving returns to New Zealand strong wool growers, whilst ensuring the finer wool producers are in capable hands.”

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