Hot on the heels of Elders finally picking up a share of New Zealand farm services group, PGG Wrightson, AWN has confirmed it has bought 10.1 per cent of the NZ Merino Company.
The livestock and property agency group, which has grown rapidly in recent years to become Australia's third largest wool and livestock selling business, will be NZ Merino's largest single shareholder.
The NZ Merino Company, founded as a 1990s niche marketing initiative by South Island woolgrowers, has evolved into an integrated sales, marketing, and innovation business with close links to international fashion industry names, including foundation family ties with the Icebreaker brand.
It is now a global leader in the marketing of ethical wool and invests in various market and textile processing innovations.
The company's ZQ program is considered the world's leading ethical wool standard, setting the benchmark for fibre quality, animal welfare, and environmental and social responsibility at a production level.
AWN has been an exclusive Australian supply partner for several years, taking advantage of the premium price opportunities associated with wool from clients with accreditation under the NZ Merino ZQ program.
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NZ Merino's finewool marketing origins and accreditation standards have seen it grow into a key supplier to leading global brands across varied market segments from luxury fashion to active outdoors and interior textiles.
Big brand consumer labels closely associated with the company include European names Reda, Lora Piana and Manteco, Fjallraven, Ikea, Glerups and Jigsaw.
"We have been fortunate to establish long-term relationships with the best, but the best have high expectations of us, which keeps us on our toes to keep getting better," said NZ Merino chair, Kate Morrison.
She said AWN's investment in the business was a strong endorsement of the NZ Merino Company and particularly its most recent ZQRX accreditation initiative.
Regen wool platform
The success of ZQ prompted the ZQRX platform's launch as a regenerative agriculture index that guides wool producers so they can improve animal, environmental and human outcomes via the wool market.
ZQRX targets include achieving positive changes on global issues such as climate change and farm biodiversity loss by promoting regenerative land and livestock management strategies.
We know that there is an increasing demand for ethical, sustainable, and now regenerative agriculture globally
- John Colley, AWN
AWN managing director, John Colley, said the acquisition was strategically significant to his company and Australian wool growers.
"We see the value that NZMC and its ZQ and ZQRX programs will deliver not only to our business, but to the businesses of thousands of Australian wool growers," he said.
"We know that there is an increasing demand for ethical, sustainable, and now regenerative agriculture globally.
"For producers who have gone, or are looking to go down those paths, AWN offers the pathway through our alliance with NZ Merino Company and its ZQ and ZQRX programs."
Strategic partner
Ms Morrison said Australia's AWN had been an important strategic partner of NZMC and a key component in the company's strategy to gain a greater presence in the Australian market.
Last financial year significant volumes of wool were sourced from Australia, and South Africa, to make up the NZ company's total sales of 135,000 bales.
Total volumes grew 30 per cent in the year, including almost 40pc in finewool throughput to 79,000 bales.
NZMC recorded its third consecutive record profit of $NZ4.4 million after tax in 2021-22, with compound annual earnings growth rate over the past five years hitting 13pc.
AWN's move into the NZ market comes after Elders this month paid $35m to buy 11.3pc of the prominent Kiwi farm sector player, PGG Wrightson, which coincidentally was an early shareholder in NZ Merino when it became an unlisted public company in 2001.
Elders returns
Elders has described its move as a "low pulse diversification strategy" without further expansion plans on the drawing board, although NZ has been on the radar since Elders quit NZ 's farm finance scene in 2000 and its half-owned rural services and wool business in 2014.
In March 2018 Elders was considered a contender to buy a half stake in Wrightson from the NZ firm's major shareholder, the Singapore-based Agria Group, or possibly its international seed distribution business.
After exploring the options the Australian agribusiness played down any serious interest in what would have been a $200m stake.
Wrightson's seed business later sold to Danish company, DLF Seeds.
Like the NZ Merino Company, AWN has had close ties to big Italian textile and clothing sector names and prides itself as having a track record of innovative wool marketing programs that connect producers to processors and brands.
Originally founded as Australian Wool Network in 1999, it is now Australia's largest independent wool broker, marketing about 20pc of the national clip, but also has a broadening focus in the wider farm marketplace.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
