Markets with Madison: Carpet wool factory wiped out, demand set to spike

Name: Markets with Madison: Carpet wool factory wiped out
Uploaded: 2023-03-03T09:13:01+13:00
Description: Bremworth's crucial carpet wool yarn factory in Napier was wiped out in the cyclone. Plus, markets fail to fire in February, how inflation is still impacting returns. Video / NZ Herald

By Madison Reidy

Senior Business Journalist, host of Markets with Madison·NZ Herald·

3 Mar, 2023 04:20 AM2 mins to read

Bremworth's crucial carpet wool yarn factory in Napier was wiped out in the cyclone. Plus, markets fail to fire in February, how inflation is still impacting returns. Video / NZ Herald

Two-thirds of Bremworth’s wool yarn supply could be out of action for months, while demand for carpet is set to spike following floods.

The carpet company’s chief executive Greg Smith told Markets with Madison the cyclone ripped through the company’s Napier plant, ruining specialist machinery and totalling an insurance claim likely in the tens of millions of dollars.

Bremworth posted a $778,000 net loss for the six months to December this week but its utmost concern was sourcing alternate wool supply offshore to ensure it could benefit from an expected uptick in carpet demand, he said.

Smith estimated between 10,000 and 20,000 homes were affected by flooding and that would cause a spike in demand over the next three months to a year.

“That could be as much as 300,000 metres of carpet that’s required.”

He explained if carpet prices could increase as a result of the disruption and demand.

Bremworth's wool yarn plant in Napier was cut off following the cyclone.

Meanwhile, with New Zealand company reporting season coming to a close, the NZX50 index failed to fire in February, down 1.77 per cent in the month.

It was a trend set across Wall Street, with the S&P500 index down by 5.46 per cent and the Nasdaq Composite reversing 6.73 per cent.

Europe’s FTSE100 index and China’s Shanghai Composite posted positive returns in February, rising 1.21 per cent and 0.90 per cent respectively.

Hamilton Hindin Greene investment adviser Mark Hampton said despite a negative month for many markets, returns remained positive for the year to date, which was an optimistic omen for the months ahead.

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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.