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9 January 2019
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Wool Street Journal

Forward contracts provide certainty for fine wool growers

Over the past four years, PGG Wrightson Wool has forged a relationship between Norwegian textile group Devold and several South Island merino wool growers.

In early November, around 30 growers, farming between Marlborough and Central Otago, plus three from Australia, met with the company and several PGG Wrightson Wool staff in Tekapo.

Growers commit to supply their wool on three year rolling contracts. Surety on the return from their clip, and participation in a brand that puts growers at the centre of their marketing, attracts most to contract to Devold.

Supply chain transparency, and the story behind the product, for example when families have been growing wool for three or four generations, is key to the Devold brand. Several local growers, plus the Australians, participate in Devold’s ‘Sheep to Shop’ programme, where products made from their wool is branded specifically to the supplier. Garments made exclusively from a particular farm’s wool carry a swing tag photo of the grower, plus a story about the farm.

Devold chief executive Cathrine Stange was at the event. She stressed how she makes it her business to visit each farm that contracts to Devold to build the story and the relationships the brand is based on.

Devold mill director Tor Jonsson presented on the company’s manufacturing plant in Lithuania, which employs 300 people, where the wool is processed into fabric then made into garments. He noted that the company’s 100 per cent growth over the past three years means the factory needs enlarging.

Craig Smith, Devold Wool Direct general manager, outlined the importance of test data from each grower to ensure the softness and comfort of garments worn next to the skin.

Grant Edwards said PGG Wrightson Wool regards forward contracts as a beneficial way for merino wool growers to optimise consistent income, noting that this relationship is a success story throughout the value chain, and that Devold is one of several international customers that PGG Wrightson works with.

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