Primary Wool Co-operative Limited was formed in 1974 by a group of local farmers to increase the returns for wool growers. Over the ensuing decades, membership has grown to over 1,300, with new shareholders joining each month and significant investment being made into the NZ wool industry.
The co-operative was originally formed in Dannevirke in 1974 as East Coast Wool Co-operative, to support the new woolspinning plant, New Zealand Woolspinners Ltd, and to allow farmers to participate further down the supply chain in scouring, spinning and exporting. So for nearly 35 years, Primary Wool Co-operative has been working to change the model to increase returns for members.
Co-operative Success and Strategic Moves
The Co-operative did well for its members returning nearly $1,000,000 dollars in rebates and dividends and 340,000 bonus shares on the original $190,000 invested. Over the next few years, the Co-operative continued to track successes and strategically move into other parts of the wool industry:
Forward Thinking Innovation: A grab sampling machine was installed in the mill before any company in the North Island.
Public Company: In 1976 a public company was formed to establish a scour which was initially managed and later purchased.
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 Co-operative entered a wool transport joint venture with McNicol Transport and participated with six other major exporters in a large wool-for-oil barter deal with Iran.
Brokering: In 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. This system emphasised on contracting to specification with strict quality control from the paddock to the mill. This was later to become the ‘Fernmark’ QA scheme. The Co-operative also became registered under ISO 9002.
Ideal Industry Model
In the early 1990’s, The Arthur D Little report into the wool industry recommended that ‘Fibre Companies’ should be set up. Meeting all of the criteria of a ‘Fibre Company’ the Co-operative made a formal submission to McKinsey & Co. The consultant company later quoted East Coast Wools as the ideal model on which to build.
Acquisitions and Mergers
In August 2001, Elders Wools was absorbed into the Co-operative with the bulk of Taranaki Farmers wool staff joining one month later. In 2002 the remaining 50% of the shares in AWE McNicol were acquired, along with a half share in Hawkes Bay Wool Processors. Talks with CRT took place and culminating in the two companies coming together as a national wool co-operative.
In 2005 the Co-operative entered into a joint venture with Elders New Zealand Limited to strengthen and expand its wool services. Elders Primary Wool Limited was formed to take over the wool stores, wool trading and transport operations. In 2014, Elders New Zealand Ltd was purchased by the Carr Group of Ashburton, returning Elders Primary Wool to 100% New Zealand ownership under the trading name CP Wool. Members of Primary Wool Co-operative now receive a rebate on wool sold through auction by CP Wool and Primary Wool Co-operative receives a half share of the profits of Carrfields Primary Wool.