In the deal announced yesterday, New Zealand Merino (NZM) would take over the marketing of an estimated 20,000 bales of the country's 30,000 annual mid-micron clip, or wool between 24 and 28 micron, suited to apparel use.
This follows news two weeks ago that PGG Wrightson had sold most of its crossbred wool business to a new wool grower co-operative, The Wool Company.
PGG Wrightson wool manager Kevin Winders said both steps were about repositioning the fibre.
"We are looking to ensure the two joint ventures focus on the two markets and do not overlap," he said.
The Wool Company, 40% owned by PGG Wrightson and 60% by growers, would handle most of the country's crossbred clip targeted at rugs and flooring end users, while NZM would focus on apparel wool markets such as Icebreaker and Smartwool socks.
"It frees up the balance of the clip for the new company to focus on," Mr Winders said of the sale of mid-micron wool.
NZM has developed direct supply contracts with local and international buyers in recent years, and Mr Winders said many of those companies could also use mid-micron wool.
The two moves did not signal that PGG Wrightson was exiting the wool industry.
Mr Winders said the moves were about improving the viability of wool for sheep farmers, with the value of fibre falling in recent years.
A task force, the Wool Industry Network, looking at how to turn the industry's fortunes around, has adopted a model of a united industry being more focused on the market but also the sector investing more money in marketing.
