Wool sector pins hopes on funding

On its last legs? The crossbred wool industry may be given a two-year lifeline to get back on its...
On its last legs? The crossbred wool industry may be given a two-year lifeline to get back on its feet. Photo by Peter McIntosh.
Two years of transitional funding from farmers is the last throw of the dice for crossbred wool to reverse its fortunes, according to farming leaders.

Meat and Wool New Zealand has proposed investing $5 million over two years in market development for wool, but Wool Partners International (WPI) chief executive Iain Abercrombie, Federated Farmers meat and fibre chairman Bruce Wills and board chairman Mike Petersen all view this as the last chance for what was once New Zealand's largest export earner.

Mr Wills hoped it would survive, but said there was a view among some farmers that enough money had been invested in wool and the result was the lowest ever prices.

"Given the current situation, this is the last roll of the dice," he said.

"If they haven't got their act together in the next two years, that's it for wool."

Mr Abercrombie agreed, but warned not to underestimate the size of the task and cost of promoting wool.

"It's a big job that needs to be done and we are up against synthetic manufacturers who have bottomless pits of money."

Meat and Wool New Zealand chairman Mike Petersen said for the next six months, money would be given to Wools of New Zealand to fund activities such as stands at two key flooring trade fairs in the United States and Europe.

Because Wools of New Zealand was owned by WPI, Mr Petersen said a requirement would be that any activities funded by the board must be available to all New Zealand wool companies.

Details of criteria for funding the remaining 18 months of the two-year project were still to be finalised, but Mr Petersen said it was likely to be contestable and designed to get joint marketing programmes among New Zealand wool companies along the lines of the Wool Industry Network plan.

As with the other wool leaders, Mr Petersen said this was one of the last opportunities for wool to pick itself up, and the decision to invest levy money was taken after consultation with farmers.

"Farmers have said things are so desperate out there we've got to do something. That is why we are going to give it another two years."

Mr Abercrombie said generic marketing had been tried and did not work, and any future investment should be promoting a brand at the point of sale and interfacing with retailers and customers to tell them how wool differed from synthetic fibres.

WPI was aiming to increase demand, to give consumers a reason to buy woollen carpets and to do that required it talk to consumers, designers and retailers.

"To do that we will have to spend money in conjunction with retailers. This is usually done on a dollar-for-dollar basis."

WPI has been using new technology and innovation to get its message across, such as internet post cards and emails to retailers telling them the story of wool and its qualities.

Mr Wills said the wool industry would one day be a university study in how not to manage a business, a story he described as "an absolute tragedy . . . and ultimately it is inexcusable that farmers allowed the wool industry to collapse."

Having spent money on the Wool Industry Network and created WPI, it was appropriate another two years of assistance was provided to help the company establish itself commercially.

He was pleased Meat and Wool New Zealand proposed reducing the wool levy from the present 5.25c a kg to 3c a kg by 2014-15, saying that better reflected returns.

Information supplied by the board shows wool production in the year to September 30 was expected to be 166,500 tonnes, generating $8.5 million in levies.

For the year to September 30 2010, production was expected to fall further to 160,122 tonnes and generate $6.4 million in levies.

 

Add a Comment