The commitment of Elders Primary Wool to industry reform is being questioned after the collapse of merger talks between farmer part-owners of the company and Wool Partners International.
The beleaguered wool industry has been thrust into further uncertainty since the failed merger talks between Wool Grower Holdings, the 50% shareholder of Wool Partners International, and Primary Wool Co-operative, the 50% shareholder of Elders Primary Wool, ended late last week after failing to reach "a mutually agreed commercial arrangement".
Wool Grower Holdings (WGH) chairman Jeff Grant said agreements in principle were put to Elders Primary Wool three times and were rejected each time, despite the plan having agreement from PGG Wrightson, WGH's partner in Wool Partners International.
"It has been the most frustrating six months of my life," an exasperated Mr Grant said yesterday.
He equally felt sorry for Primary Wool Co-operative chairman Bay de Latour, who he said had devoted much of his life to the wool industry.
Mr Grant said WGH would now focus on releasing its capital-raising prospectus, which it had delayed during merger talks, but he would be happy to restart talks in the future.
Mr de Latour has also left the door open for renewed talks, saying delays in WGH's releasing its prospectus had created some uncertainty about the structure of a future jointly owned entity.
In an interview, he said WGH was not yet fully functional, but added all was not lost.
"I am disappointed and hope the opportunity comes again when the dust settles," he said.
PGG Wrightson sold its wool business to Wool Partners International for $37 million and included a $10 million loan to WGH.
It also included wool procurement, the New Zealand Woolhandlers logistics, storage and testing business, and exporter Bloch and Behrens Wool.
Plenty of sniping and animosity has been seen between Elders Primary Wool and Wool Partners International in the past, but comments by Mr de Latour and Mr Grant indicate a desire to have a more harmonious relationship.
Mr de Latour said the breakdown in talks should not affect the wool industry, as each commercial company was repositioning itself in the market.
"If we respect each other's patch, it shouldn't have any effect," he said.
Mr Grant took a similar bridge-building stance, saying it was critical for both companies to reposition themselves and wool to raise the price of the fibre, and it was in the best interests of farmers for both groups to respect each other's strategy to achieve that.
