Wool Board has a black ink year

By PHILIPPA STEVENSON agricultural editor

A $2.5 million boost in woolgrower levies has helped the Wool Board into the black for the first time in five years.

The levy increase - mostly the result of a price lift for fine wools - and a jump in investment returns gave the board a net surplus of $133,000, even after paying $3.2 million for the McKinsey report on industry restructuring.

From 1996 until last year, it has dipped into its cash reserves, reducing them from $152 million to $116 million over the period.

Total revenue for the year was $51.53 million.

Board chairman Bruce Munro said 30 per cent of the group's activities for the year were paid for from sources other than levies.

Just over $15 million was generated from investments and the activities of its subsidiary companies WoolPro and Wools of New Zealand.

But a strong market for wool - particularly Merino, which in some cases recorded prices 50 per cent up on last year - was the main contributor to the balanced books.

Mr Munro said the average price for the full season was 440c a kilogram of clean wool - 32c, or 8 per cent, higher than the previous year.

He attributed this to the re-entry of China to the market, the improved textile market in Europe, continuing growth in the US economy and a buoyant Australasian market.

Further price gains had been made lately, partly because of the falling dollar.

Mr Munro said the industry review by the McKinsey management consultancy had been particularly demanding in the past year, both because of the need to provide information for the review and the resulting uncertainty it created within the organisation and the wider industry.

Further demands were expected this year with the development and assessment of business plans for the new bodies recommended in the McKinsey report.

But he said that work would not impinge on growers' intangible assets or continued development of industry arrangements.

He predicted that the annual meeting at the end of the month would "be a watershed event in the evolution of the New Zealand wool industry" and there was unlikely to be a turning back from any new path taken in the next 12 months.