Carpet deal for NZ wool

Carpet deal for NZ wool

Elders NZ managing director, Stuart Chapman.

09-02-2009

A partnership to increase consumer demand in the United States for luxury carpets made from 100% New Zealand strong wool has been initiated by Elders NZ.

Wool Marketing Enterprises (WME) a subsidiary company of Elders Primary Wool has been established to complete the pathway of NZ strong wool from the farm to US carpet giant, CCA Global Partners (CCA) and major US carpet manufacturers.

Elders NZ managing director, Stuart Chapman, says the initiative has been structured so that strong wool growers can share in the added value process of converting wool into carpets.

"We have developed a business model that is more transparent and efficient at moving wool from farm to market."

The business venture has taken a year to put together and will target wealthy home owners where quality is more important than price when they make decisions about buying carpets or rugs.

Elders have the largest wool handling, warehousing and trading business in Australasia.

The rural network of Elders Primary Wool Limited will source and aggregate wool off-farm. J.S. Brooksbank & Co Australasia will look after blend specifications, scouring and shipping.

Having the wool processed into yarn and woven into carpet in NZ would have been the ultimate model, but CCA has partners with manufacturing capabilities in the US.

He says the initiative is primarily aimed at increasing profitability for strong wool growers. But before that can happen there needs to be increased consumer demand for woollen carpets.

Chapman says a branding programme is being developed by Elders and will be delivered by CCA's retailers telling consumers about NZ strong wool and its superior fibre qualities.

It is necessary to understand the decision making process and what motivates consumers when they buy carpets and rugs.

Consumer surveys in the US have shown there is a significant trend towards interior textile products that are made from natural and renewable resources.

He says NZ strong wool has a very good story to tell. It is produced in an environmentally responsible way through sustainable land use and management. There are no other carpet fibres that can claim they are produced on the clean green landscapes of NZ.

CCA Global Partners (www.ccaglobalpartners.com) is the largest carpet retailer in the world with more than 3600 retail locations. They are the best in the carpet business.

Their retail interests include International Design Guild, ProSource, CarpetOne, Floor and Home and Flooring America.

He says the company knows how to sell carpets and rugs. They have creative retail point of sale systems supported by highly trained staff.

They have extensive marketing resources that will be used to support the sales professionals who interface with interior designers and consumers on the shop floors throughout the US.

Chapman was unable to say what supply contracts or prices would be offered to growers. That detail hasn't been finalised but the objective is to ensure wool growers are profitable.

WME is working with CCA to determine the wool types needed to meet different carpet specifications. There is likely to be several contracts offered to growers.

The global recession and low consumer demand is not good for NZ strong wool and prices are now as low as they have ever been. This partnership is focused on increasing prices.

Growers supplying wool under contract will have closer trading relationships with carpet manufacturers.