Wools of NZ, Primary Wool merger to go to farmer vote in November

A proposed merger between Wools of NZ and Primary Wool will go to a vote in November. Photo / NZME

About 2100 farmers will vote in November on a proposed merger between grower-owned export and marketing company Wools of New Zealand (WNZ) and Primary Wool Co-operative to form a fully integrated supply chain business.

Ahead of the vote, Primary Wool will go to 100 per cent ownership of Te Kuiti-based wool broker CP Wool with the purchase of Carrfields Ltd's 50 per cent shareholding.

Carrfields will turn its focus on to the specialist manufacturing of wool and hemp products through its majority ownership of the NZ Natural Fibres business alongside Hemp New Zealand and the other minority shareholders.

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"These strategic moves are the outcome of year-long talks between Carrfields Ltd, Primary Wool Co-operative and WNZ, which collectively handle 37 per cent of New Zealand's wool clip," WNZ chair James Parsons said in a statement.

"Growers have been asking for consolidation and now they will get the chance to have their say. Together, we can deliver the vision and scale required to make a real difference to New Zealand's struggling wool industry."

Richard Young, chair of Primary Wool and director of CP Wool, says the proposed merger marks the start of a new chapter for the wool sector and will act as a launch-pad for New Zealand to realise the full potential of wool.

The combined business would enable both businesses to realise their potential as a single grower-owned entity, he said.

The merged organisation's strategy will be underpinned by a shift from wool as a raw commodity to grower-owned and branded consumer wool products.

"Ultimately, the development of an integrated supply chain aims to improve returns for our growers."

Craig Carr, managing director of Carrfields and chairman of CP Wool, said the wool industry needed leadership, investment and a strategic focus to deliver better outcomes for long term participants.

"Carrfields has decided that supporting the joining together of the two grower organisations and turning our attention to investing in the future development of wool and hemp products makes good sense strategically.

"In the current fast moving environment, we want to ratchet up our activity through NZ Natural Fibres and we have a number of exciting opportunities in front of us."

A national road show on the proposal is planned for next month.