Representatives from Ramsay McDonald Pty Ltd were at the 116-year-old mill yesterday as part of a $500,000 shipment of machinery arrived from Australia.
Bruce Woollen Mill managing director John Stevens said the partnership would double the mill's business and get the company into the overseas market.
Ramsay McDonald Pty Ltd was appointed as Bruce Woollen Mill's agent in Australia in March.
Since then the two companies have worked together to secure $500,000 worth of machinery from Australia - with seven container-loads of machines arriving at the mill this week.
Four containers are already on site, with three still in Dunedin.
The ''near-new'' equipment would make fine worsted yarns for the knitting industry, allowing the mill to offer a wider range of products, increase capacity and develop new industries, Mr Stevens said. It would produce wool and wool-mixes and make specialist yarn.
Ramsay McDonald Pty Ltd managing director Peter McDonald said the machinery would enhance the mill's operations.
''The diversity of machinery gives it huge flexibility, and the ability to do short [production] runs.''
The Melbourne-based company is a major supplier to textile businesses in New Zealand and Australia, sourcing textile machinery and chemicals, and producing clothing and accessories.
''We like the idea of 'made in New Zealand' instead of 'made in China','' Mr McDonald said.
The mill would produce mainly alpaca and merino fibre for the company, he said, hinting it would introduce a new technology.
It was hoped production of a new ''special yarn'' would begin by October, and Mr McDonald expected this to be the first yarn off the new production line.
Half the new equipment arrived at the mill four months ago, to improve combing, and replaced machinery sold to Ashford Handicrafts Ltd in December 2011, after the Ashburton company bought a production line and hired four QualitYarns staff.
The mill employs 28 people - about half of these former QualitYarns staff - and Mr Stevens hoped to boost staff numbers as the company expanded.
However, until machines were recommissioned and the new yarn developed, just how many jobs would be created was not yet known, he said.
In November 2011, the mill seemed set to close when QualitYarns issued redundancy notices to its 28 staff, but in April last year Christchurch-based Wool Equities Ltd, as part of a consortium of New Zealand businesses, bought the plant, saving it from closure.
