By PHILIPPA STEVENSON agricultural editor
Negotiations critical to the establishment of StrongWools NZ should be completed next month, but wool exporters have again warned that the new company will cause industry-wide chaos.
The Wool Board said the taskforce investigating StrongWools, a company intended to procure and market the bulk of the country's
wool, had presented a business plan.
Implementing the plan would depend on several difficult commercial negotiations, which would then require grower endorsement.
Board chairman Bruce Munro said there was still a long way to go to get StrongWools ready, and conditions on the company had to be fully explored.
"As soon as they are done we will move on it if it proves to be what we think it can be."
But Wool Exporters Council executive manager Nick Nicholson said if the new company went ahead farmers would take "a long-term financial pasting which could well spell the end of wool as a major industry."
Mr Nicholson said some ideas for improving the industry's performance paid only lip-service to the need to improve returns to growers but "there is not one shred of anything resembling a practical or common-sense plan to tackle the underlying problem of falling demand, which is the sole cause of our weak prices."
Mr Munro said the industry's problems did not stem from lack of demand. There was a huge gap between the farm gate and the final consumer "filled by a pipeline that's not particularly well integrated in terms of meeting consumer needs," he said.
"What we are trying to do is bring about a very significant change in the supply chain, which we think will have beneficial impact in terms of demand, if anything.
"The farmers have taken a view that the existing system is antiquated, and does not keep them in touch with their customers - the very reason there would be declining demand for wool.
"When you are integrated with the market and understand its needs then you can continue to adapt your product to those needs."
Mr Munro said he was confident the council was not reflecting a universally held opinion.
Mr Nicholson said wool exporters were not concerned about the prospects of competing with any new wool trading enterprise. But they were worried that proposals such as StrongWools were doomed to failure.
They did not address the need to re-create demand for wool and could build a customer base only by heavily underselling the market.
Meanwhile, the board said Richard Janes was standing down as taskforce chairman but would remain a member. A new chairman would be appointed.
