It was announced today that the long awaited merger between the two biggest wool companies had failed.
This will be a major disapointment for wool growers who have been suffering from low returns for years. Many saw this industry rationalisation as the one bright hope, that may create unity and focus, in an often divisive industry.
The cynicism that has plagued this sector will return, as farmers are driven to view wool as a cost in producing sheep meats, not a quality product, as it deserves.
Already breeding programs are being targeted to sheep without or with minimal wool, and with less genes to target, more progress may be made in other attributes of the animal, that may return more dollars.
Wool Grower Holdings, 50% shareholder of Wool Partners International, and Primary Wool Co-operative, 50% shareholder of Elders Primary Wool, have announced today that they have ended their endeavour to form one single co-operative.
"While we do feel it has been a worthwhile exercise holding discussions and investigating the potential of combining, it seems that we have been unable to find a workable solution that is suitably beneficial to all parties" said Bay de Lautour, Chairman Primary Wool Co-operative. Jeff Grant, Chairman Wool Grower Holdings agreed, "Together we held investigative discussions and we firmly believe we needed an option that was beneficial to the single co-operative and farmers. We were unable to achieve that."
Both co-operatives believe that it is critical to reposition wool in the market place to raise the price of wool to farmers and that it is in the best interests of farmers that both groups respect the others’ strategy to bring that about. Wool Grower Holdings will proceed to raise capital by issuing a prospectus to complete the purchase of their share of Wool Partners International, and develop its wool programme. Primary Wool Co-operative will continue to progress their Wool Marketing Enterprises Programme through their joint venture Elders Primary Wool.
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