Wool man a stalwart to his follicles

Reflecting on a lifetime of commitment to the wool industry, Bay de Lautour says he has always had condience that his involvement would turn out well.

16-02-2009 | Hugh Stringleman

Wool co-operative pillar, Bay de Lautour, says the Wool Partners International venture missed a great opportunity to unify the fractured industry.

Over 45 years as a co-operative shareholder, director and at times financial backer, de Lautour has many times demonstrated his integrity and commitment to fellow farmers.

So it was no surprise to learn Elders Primary Wool (EPW), of which he is a director, made a detailed submission to the Wool Industry Network (WIN) strategic planning exercise and he himself made a personal submission.

Further to that, discussions were held with WIN "unto the point when we thought EPW would be a service provider to the new venture".

But then WIN teamed up with PGG Wrightson Wool, which ruled out anything connected with Elders, de Lautour says.

Likewise, a proposed purchase by EPW of Allied Wool was abruptly suspended by Allied Farmers, until it too was folded into Wool Partners International (WPI).

EPW would also have been interested in purchasing Wools of New Zealand, such is de Lautour's belief in the value of its work, but it has been swallowed by WPI for an undisclosed amount.

"Wool Industry Network didn't take the whole industry with them, so they have invited the war of words with the exporters and the private buyers."

After more than four decades of striving for co-operation and vertical integration, de Lautour finds himself effectively opposing WPI and he regrets that circumstance.

"Our main points to WIN were that all the industry should be included and that any money should be spent in the marketplace, not on NZ infrastructure.

"We spent a lot of time working with WIN before they suddenly announced they were buying Wrightson.

"We are being criticised by some for not joining something that has not got off the ground yet, but in our view will have an unsustainable debt when it does.

"Surely ‘they' should join us?" he asks.

"Us" for de Lautour is more than 800 farmer-shareholders of Primary Wool Co-operative, which has a 50/50 joint venture with Elders New Zealand in Elders Primary Wool, formed in 2005, which procures about 30% of the national strong wool clip.

EPW has more than 60 staff nationwide and eight wool stores, six in the North Island and two in the South Island.

de Lautour is a wool man to his follicles. It began with farming on his own account from 1955, on the family farm at Waipukurau, Southern Hawke's Bay, then Romney breeding from 1969, as part of what became the Wairarapa Romney Improvement Group.

Through a connection by marriage to the late Sir John Acland, chairman of the Wool Board from 1960 to 1972, he was introduced to wool politics.

Then in 1974, after being on the losing side of the great wool acquisition debate of the early 1970s, de Lautour joined a committee to form NZ Woolspinners in Dannevirke, being promoted by the Kirk Labour Government through the Development Finance Corporation.

He was one of a number of farmers who took shares in their own right, as well as being joining the co-operative.

The East Coast Wool Co-operative (ECW) of about 400 farmer-members was formed to supply NZ Woolspinners, because the region was acknowledged as producing some of the best white strong wool. ECW also took over wool merchant and exporter Associated Wool Exporters.

Farm-to-Yarn followed, as a premium supply pool for Feltex Carpets, which in the early 1990s paid 15c/kg premium above the market.

Feltex took all of Woolspinners and it is now owned by carpet company Godfrey Hirst.

Then in 2001, ECW purchased the Elders NZ wool division, which took its NI operations to 70,000 bales annually. A year later, it bought the wool division of CRT in the South Island, as a "strong wool company" called Primary Wool to give effect to the McKinsey recommendation.

"We were shut out by Wrightson then, too, which failed to fire, but by that time the momentum was lost," de Lautour says.

In the late 1980s and early 90s, he was a director and then chairman of first East Coast Venison co-operative, then Venison New Zealand (VNZ), which took over Wrightson Venison with help from the Game Industry Board.

But when Fortex went mad and paid ridiculous wages and procurement prices, VNZ went into receivership and deer farmers lost their money. Aghast, de Lautour vowed to never let that happen again to a co-operative under his governance.

He has at times put his family money into the AWE NcNicol Transport fleet and into Primary Wool Co-op during the struggle years of 2003-2005.

The CRT merger didn't produce the volume of wool required to offset the increased costs of the now national store coverage, which brought the co-op close to bankruptcy.

He took over management as executive chairman, on no pay and slashed costs to restore profitability.

Then Elders NZ came calling again, keen to get back into wool when Wrightson merged with Pyne, Gould, Guinness and then purchased Williams & Kettle.

Most of the Williams & Kettle staff came over to EPW, which is now a significant second in wool procurement for auction, plus about 50,000 bales a year bought privately.

Farmer-members get a 3c/kg discount on wool handling charges, which is over $500 a year for a 100-bale clip, more than paying their shareholding requirement.

Howie Gardener, of Balclutha, and de Lautour are the PWC directors on EPW and de Lautour's son Hamish, now farming 20,000 stock units on the Waipukurau home farm, is a director of PWC.

Aged 75, Bay de Lautour is farming at Takapau, with deer, lamb finishing, cropping and now grape growing.

He is excited about the Elders Primary Wool venture with US carpet retailing giant co-operative, CCA Group (NZ Farmers Weekly, Feb 9).

"I know the CCA connection is going to work for growers and my reward will come."

Reflecting on a lifetime of commitment to the wool industry, de Lautour says "I have always had confidence that my involvement would turn out well."

Meanwhile, Elders Primary Wool has announced another support and supply relationship with Romney New Zealand, which was known to be disenchanted with the WIN/WPI process.

US distributor, Everett Deneane, will sell the Nepalese hand-woven rugs made from NZ Romney wool. These are commissioned from artisan weavers in Nepal.

The made-to-order product has already had interest from interior designers and luxury retailers in the US, but there is plenty of room for growth, according to Romney NZ chairman, Hugh Taylor.

More than 90% of carpets and rugs sold in the US are synthetic, but the recent trend towards sustainable and eco products as been a catalyst for retailers to move towards wool products.

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