Merino growers pull socks up

DEAL: NZ merino growers are being courted by the largest global supplier of wool socks in the active outdoor market which wants to step up its wool contract with them.

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The largest global supplier of wool socks in the active outdoor market wants to step up its wool contract with New Zealand merino growers, worth more than $100 million the last nine years.

A top executive team from the United States company SmartWool will meet wool farmers at a North Canterbury function centre on Monday.

The company has indicated it will extend orders for New Zealand- grown merino and mid-micron wool in its partnership with The New Zealand Merino Company (NZM) from double-digit growth projected each year for the next three years.

SmartWool will go into more detail at the meeting about its increasing demand for 18 to 26 micron wool and give farmers volume and price projections for its wool requirements to meet growing orders.

NZM chief executive John Brakenridge said SmartWool was a major buyer of merino and mid-micron wool and its commitment to build the contracts sent a positive signal to farmers.

He said the contract model was a proven template for the wool business.

"Around 20 per cent of the merino and mid-micron clip between 18 and 26 microns will be in this one contract. It's a valuable contract. The key thing is it provides some certainty in the future and is encouraging people to grow the wool."

Brakenridge said merino farmers had been shaping their wool business to the micron dimensions needed for the active outdoor market and would continue to do so with SmartWool looking to grow the business.

"Direct contracts between our growers and brand partners like SmartWool, where both parties benefit, are unique. SmartWool's forward commitment to growers will further encourage the production of more wool that the market demands."

Since 2001 the SmartWool contract has generated more than $100m in business. The company, originating in Steamboat Springs, Colorado, was founded in 1994 by New England ski instructors who saw the potential for developing woollen products for outdoor activities.

Today SmartWool is a wholly owned subsidiary of The Timberland Company and the largest producer of woollen socks sourced from certified Zque producers from New Zealand. It designs, manufactures and markets other apparel and accessories for the active mountain and lifestyle consumer.

SmartWool president Mark Satkiewicz will be among the executives at the farmers' meeting and will outline where SmartWool is positioned in the active outdoors market and its plans for business growth.

He said New Zealand wool added to SmartWool's story and demonstrated to consumers it cared about where its products came from and how well they were made.

Satkiewicz said SmartWool had achieved strong sales globally and had continued to grow during the economic recession. "As we grow, so will our need for wool."

Gola Peaks Station owner Mark Rutherford said the meeting was encouraging for New Zealand wool farmers who appreciated their contractual partnership with the company.

He said the contracts were fair and meant he could budget three years in advance.

NZM generates sales worth about $105m a year mainly for the export market. The branding and marketing company has 80 per cent of the merino clip and deals with half the value of New Zealand's mid-micron wool.

- © Fairfax NZ News