Wool co operative considers options

Jeff Grant. Photo / Supplied

Wool Partners Co-operative has failed to get enough support from farmers to continue but there could be alternatives for change in the industry, says chairman Jeff Grant.

The co-operative's capital raising closed on this week with nearly 40 million subscriptions for $1 shares for every kilogram of greasy strong wool - equivalent to 30 per cent of the strong wool clip.

However, the backing from farmers was less than the $55 million support needed to proceed, the co-operative said.

"There is a clear groundswell of growers wanting to see change in the strong wool industry and willing to invest to make that happen," Grant said.

"Those who have subscribed, and even a number of growers who haven't, have encouraged us not to give up and, while we can't do anything more under the current offer, the board of Wool Partners Co-operative are determined to work with like-minded growers to develop an alternative," he said.

"We're not sure how long that will take but we hope to be in contact with those that have shown their support for the co-operative over the next few weeks."

Alternatives could range from looking at another co-operative through to the possibility of consolidation in the industry.

"It has to be commercially viable, it has to have something that will see some market change in terms of the way the wool industry operates.

"We mustn't forget that the reason this whole debate's taken place is the dissatisfaction by growers in the returns they've received from wool over the last decade."

The price of wool had nearly doubled in the past four months, he said.

"The reality is nothing's changed in the market. This is just a pipeline issue in terms of the product so the long-term sustainability of the price is still not guaranteed."

Cheques received from growers would be destroyed.

Had the offer been successful the funds would have been used to buy certain assets and businesses from Wool Partners International (WPI).

WPI chairwoman Theresa Gattung said: "Thousands of growers have pledged significant capital to secure grower participation in the strong wool industry and together with [PGG Wrightson], WPI look forward to working with that grower contingent."

WPI would keep its growers informed over the next few days as decisions were made.