Acrimony persists when changing wool industry most needs unity

Division and entrenched opinion have again mired discussion on wool industry restructuring, making it clear that sheep farmers will need to vote with their wool clip to achieve needed reform.

The Wool Board annual meeting in the Dunedin Town Hall yesterday showed little of the grower unity that surfaced early in the year in the comprehensive vote for change sparked by the $3.3 million McKinsey Report on ways for the declining industry to improve profitability.

But the meeting may not give an accurate picture of the industry's future, given the attendance by a regular band of "hui hoppers," and an otherwise low farmer turnout.

The fledgling grower supply collective Romney NZ, chaired by Sir Brian Lochore, has received significant commitments from farmers since its launch in July and yesterday Sir Brian put his weight behind the proposed farmgate-to-market company, StrongWools NZ.

The StrongWools task force chairman, Richard Janes, told the meeting that the new company would need to secure 60 million to 80 million kilograms of wool annually to be viable.

So, if farmers stand by their pledges to Romney NZ, the wool might all but be in the bale.

But yesterday's acrimonious meeting made it clear that corralling woolgrowers is more like rounding up cats than sheep - a perception confirmed in yet another sector review.

In a just-released performance and efficiency audit of the board, the PA Consulting Group warns that a challenging period of change is ahead for an industry where consensus is evasive.

A restructuring oversight group, the implementation project team (IPT), is well aware of the risks in its monumental task, said its chairman, Mike Andrews, chief executive of Fletcher Challenge.

"To set about radically reforming an entire industry is a huge challenge and responsibility ... particularly when the industry is such a significant contributor to the wealth of the nation."

Mr Andrews said the task had been growing in complexity as more groups were consulted, with many decisions affected by other events and decisions.

"While all of this activity is going on to develop, test and establish these new organisations, there is also a process to be gone through in disestablishing the Wool Board."

He outlined a timeline with three key deadlines. By December 4, the viability of the new organisations would be established, and by April 18 next year discussions would have determined how the board's $116 million of reserves would be allocated and what the new wool levy would be.

By July the new companies would be ready to trade independently, and the board would cease to exist.

Board chief financial officer Geoff Milner told the meeting that the "guesstimated" cost of restructuring was up to $15 million. The board's central Wellington building would be put up for sale this December.