Chairman’s Report 2014
The Co-operative has had the most active year of any year since the formation of the joint venture.
Elders Primary Wool has continued to gain market share of a rapidly shrinking wool clip. The reduced sheep numbers resulted in a 30% reduction in profit for the 2014 year. This is reflected in our accounts.
The Co-operative received a further dividend of $1,000,000 which was partly used to repay preference shareholders, leaving a good amount of cash for other initiatives considered beneficial to the industry.
Read the 40th Annual report as well as more about wool week, shareholder benefits and NZ Yarn in the rest of the chairman’s report here
The Co-operative funded the Prince of Wales Campaign for Wool “Wool Week” in New Zealand. This was very professionally carried out by Anna Caselberg with prominent signage in the main cities and fashion displays in the leading stores in Auckland. We have continued to fund social media work and a fire-safety campaign for the Campaign for Wool in New Zealand.
Shareholding numbers have continued to increase rapidly to 1240 and $576,434 of new shares have been issued for cash or by rebate during the year. Shareholders have been rewarded with discounted wool packs and rebates to a value of $950,000.
Wool Equities Limited
The Directors continued efforts to unite farmer bodies led to a number of meetings with Wool Equities. This organisation holds the remnants of $30 million shares issued to farmers from Wool Board Reserves and has 9000+ Shareholders. Following large losses from the biotech development, producing products out of the proteins extracted from wool, the new Board of WEL had bought a Yarn Spinning Mill in Milton and a Weaving Plant in Palmerston North with the remaining funds. Both plants had not been provided with working capital and were about to fail. The Directors of the Co-operative and Directors of WEL agreed to change the Constitution of WEL to allow Primary Wool Co-Operative to subscribe to 5% of shares. The Co-operative has started to restructure the business and has taken security over the assets of Bruce Woollen Mill. We expect that we will see the enterprises come into profit and contribute considerable added value to our wool clip – merino, mid micron and crossbred.
The Elders Australian and the New Zealand shareholders sold their New Zealand assets to Winslow Ltd, owned by the Carr family in Ashburton. The Carr family have a diversified agricultural business – seeds, contracting, dairy farming, sheep farming and motor and machinery agencies. The Elders Primary Wool joint venture will continue as a stand-alone Company and at some time there will be a name change by negotiation.
The Co-operative greatly assisted Elders Primary Wool in negotiating the purchase of the former Christchurch Yarns from the Receiver and rebranding to NZ Yarn. The sale was finalised in November 2014 with Elders Primary Wool holding approximately 58% of the business. NZ Yarn is the only large specialist carpet yarn maker in the southern hemisphere where farmers can supply wool direct. Via existing relationships with international carpet manufacturers, NZ Yarn will also supply yarn for the Just Shorn program, thus enabling farmers to be involved in the whole value chain.
Our Directors, along with our Secretary and staff have had an extremely busy year, even busier than last year. Thank you to you all.
M B de Lautour