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New Zealand govt. announces $36 million investment fund to boost Sheep and associated industries


The New Zealand government announced a $36 million investment fund that will revolutionize the sheep industry in the country. The New Zealand Merino Company (NZM) and the Government’s Primary Growth Partnership (PGP) announced the $36 million and a 5 year plan that is aimed at increasing the impetus and the impressive economic returns that have been witnessed in the country’s fine wool sector.


The resultant overall effect of this investment is expected to be the substantial spillover that the New Zealand Sheep industry and the New Zealand economy stand to benefit from. Out of the total investment sum, NZM in conjunction with its supply chain partners will throw in about $21 million while the remaining $15 million will be funded by the PGP.


Despite the fact that demand currently tends to exceed supply due to partnerships in active outdoors markets with companies like NZ’s Icebreaker and Smart Wool,  NZM has held back from making offshore procurement and instead looks to grow its supply base from NZ. This initiative has been largely supported by a number of new partnerships in the Luxury and Superfine suiting markets.


To this end, New Zealand’s integrated programme entailing science, technology and innovative market solutions, the country’s wool won’t be grown for specific end retail markets alone but rather, the philosophy of market partnerships in investments is expected to foray into a range of other income generators for New Zealand’s sheep farmers such as meat, lanolin and leather goods.


Crucial to this investment initiative will be a focus on the productivity gains and the production changes that will help serve the added market demand that is to be generated. Details of these key aspects of the investments are to be discussed in mid June in a series of planned grower meetings. 


NZM Chairman John Nichol recognized the role the NZ government had played in the formation of PGP admitting that, even though it was robust and demanding, it forced the industry to seriously think about innovation, integration and especially value capture for farmers and the country’s economy with reference to the sector. In the nine months since the beginning of the initiative, he said that new opportunities had emerged as a result of the partnerships that had been created.


NZM currently boasts of fibre sales of about $105 million yearly, about 80% of NZ’s Merino clip and 50% of NZ Mid-Micron clip by value. The company links grower suppliers with premium global brands that buy their fibre with the aim of targeting leaders in the international apparel market.


May 31, 2010.


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