Furniture company out to help lift wool prices

For years, the sector has been looking for answers, with a library of reports and seemingly more working groups and committees formed on the subject than the current government has put in place since it was elected in 2017.

Ironically, one of the myriad of government working groups was actually set up to look at NZ's ailing strong wool sector. The outcome was yet another industry report and the establishment of the Strong Wool Action Group (SWAG), which has done quite a bit of talking, but provided little action - so far.

However, recent moves by some of the country's manufacturers may help the strong wool sector turn the corner towards better and more sustainable prices.

Last year, carpet maker Bremworth announced that it would no longer manufacture synthetic floor coverings and only produce carpets and rugs made with 100% NZ wool. The company rolled its last synthetic carpet off the production line in May.

Meanwhile, NZ Merino subsidiary Keravos is looking to commercialise a process to combine strong wool fibres with various polymers for use in injection-moulding plastics.

Now one of the country's largest bed and couch retailers has committed to paying New Zealand farmers a fair price for their wool, as part of its efforts to make its business more sustainable.

In recent months, Napier-based Big Save Furniture says it has seen huge consumer demand for its range of locally-made furniture using New Zealand wool.

Managing director Tom McKimm says the company has committed to paying farmers a 'fair price' for their wool as part of Big Save's sustainability efforts.

"The pricing we are seeing for wool simply isn't sustainable, so we've decided to disrupt things a bit and commit to paying farmers $4.50/kg for their wool," he told Rural News.

"We're doing this so we have a long-term supply of wool we can rely on, but also to help look after our primary sector and an industry that produces a phenomenal product."

McKimm says strong wool growers need improved returns.

ANZ finances the company and its managing director of business banking, Lorraine Mapu, says along with paying farmers fair prices for wool, Big Save has also invested furthr in the sector.

Mapu told Rural News that the company's commitment to NZ wool can be seen in its recent purchase of four sheep and beef farms in the Ākitio, Hawke's Bay and Tararua regions.

"There's no question they've got a real passion to get more dollars back to the farmgate," she adds.

"We all know that farmers in the sector need improved returns, which supports more sustainable farming practises in the long run. So, it's great to see this kind of innovation and investment going on."

Mapu says ANZ- the country's largest rural banker - not only helped Big Save with its financing, it also helped connect the company with key parts of the wool sector, right from the farm gate to processing, to help it gain better knowledged and understanding of the NZ wool industry.

McKimm adds that Big Save is seeing strong consumer interest in what materials are being used in its products, where they are being made and where they will end up.

"People want transparency - they want to know where a product is coming from and what will happen to it in 40 years' time, when it ends up in a landfill."

He says wool's natural qualities, including being fire retardant and hygienic, make it an ideal replacement for foam filling and padding in furniture.

"It is also biodegradable, which means it is much easier and safer to dispose of at the end of its life."

The company is also exploring other uses for wool including the installation of tightly-woven mats as fire-retardant ceiling panels or using them as a non-toxic alternative to weed-killer, to stop grass from smothering native saplings.

"Every avenue you go to with wool, you just start to say 'well this is a no-brainer - why wasn't this being done before?'," says McKimm.

"We want to ensure our products are both sustainable and genuinely good for the environment. It's not easy, but it can be done."

Why So Low?

Since 2017, spiralling low returns for strong wool have plagued the NZ sector.

during this period, wool prices have plummeted from around $5/kg in 2017 to less than $2/kg today. At this price level, most strong wool growers cannot even cover the cost of shearing their sheep.

Most of New Zealand's strong wool is used to manufacture carpets for European and US homes and commercial buildings. Aside from the wool processed in New Zealand, most of the world's supply is processed in China, where tightening environmental rules have pushed up the cost of processing.

In addition to this, the demand for woollen floor coverings - which tend to be more expensive - have never fully recovered in Europe after the Global Financial Crisis.

As a result of higher wool costs, carpet producers have tended to alter the blends of their mixed synthetic and natural materials to use less wool - further decreasing demand and prices for NZ strong wool.