Cooperative
from the outset
In 1972 a Dannevirke Development Group was looking to set up a wool
spinning mill in the District. The Perendale group and Bay de
Lautour
were asked to join an investigating committee to put forward a
proposal. It was decided to build a large spinning mill capable of
accommodating six spinning lines, with farmers having a 30% share. The
group called a meeting of interested farmers to flesh out ideas. The
outcome was an offer to buy AWE using a Cooperative, with that
cooperative underwriting the farmer share in the spinning mill, NZ
Woolspinners Ltd. The aim was to shorten the supply chain and get the
grower closer to the end user, and also to share in the profits. In
terms of profit sharing, East Coast Wool Cooperative (later renamed
Primary Wool Cooperative Ltd) returned nearly $1,000,000 dollars in
rebates and dividends and 340,000 bonus shares on the original $190,000
invested.
East Coast
Wools
The Cooperative started the business under the management of two of
the previous owners and had 468 members, access to the existing
overseas markets, continuing to use the AWE name, as well as the new
supply to the mill. A grab sampling machine was installed before any
company in the North Island. In 1976 a public company was formed to
establish a scour which was initially managed and later purchased by
the Cooperative.
Largest
supplier to Feltex
In 1980 NZ Woolspinners Ltd was sold to Feltex but supply arrangements
continued. These supply relationships later turned into large long term
monthly contracts supplying the same volume and types every month of
the year, making the Cooperative the largest North Island supplier to
Feltex.
Transport
In 1984 the Cooperative entered a wool transport joint venture with
McNicol Transport, and also participated with six other major exporters
in a large wool-for-oil barter deal with Iran.
Brokering
1988 a Wool Brokering arm was established at the Napier wool selling
centre to give clients more diversification.
Farm to Yarn
and Fernmark
In 1994 Farm to Yarn Ltd was set up to run a “back to back” pooling
system between farmers and Feltex, with the emphasis on contracting to
specification with strict quality control from the paddock to the mill.
This was later to become the “Fernmark” QA scheme. The Cooperative
also became registered under ISO 9002.
Model in the industry
The Arthur D Little report into the wool industry recommended at about
this time that “Fibre” companies should be set up. The Cooperative
already met all the criteria of a ‘fibre company’. Submissions were
made to McKinsey & Co and were later quoted by them as the
ideal model on which to build. After the report the Cooperative was
the first company to go to the implementation committee with the offer
to be involved in the “reform process” but were shut out of the process
by politics. The “One Wool” concept with Wrightson and Feltex followed
but were found to be incompatible.
Further
changes and acquisitions
In August 2001, Elders Wools was absorbed and in September the bulk of
Taranaki Farmers wool staff came across. In 2002 the remaining 50% of
the shares in AWE McNicol were acquired, along with a half share in
Hawkes Bay Wool Processors from Elders. Talks with CRT took place and
it was decided that joining the two companies together as a national
Cooperative would give us the credibility to move the industry
forward. The profits of the Company would be shared among those that
become shareholders. Those profits were bolstered by one of the most
profitable transport companies in the country, as well as those of the
processing operation.
JV with Elders
In 2005 the company entered into a joint venture with Elders New
Zealand Limited to strengthen and expand its wool services. Elders
Primary Wool Limited (EPW) was formed to take over the wool stores,
wool trading and transport operations. The 800+ shareholders of PWC now
receive a rebate on wool sold through auction by EPW as well as reaping
the benefits that Elders brings to the table, including the exciting
new Wool
Marketing Enterprises initiative.
