$2.5m NZ connection

17 Aug, 2006 07:00 PM

THE Australian Wool Testing Authority (AWTA) has finalised its 100pc ownership of the New Zealand Wool Testing Authority (NZWTA) for NZ$2.5 million.

New Zealand-based Wool Equities chairman Richard Bentley announced last week that the company had entered into an agreement to sell its 50pc shareholding of NZWTA to AWTA.

"The sale is unconditional and becomes effective on September 1," Mr Bentley said.

"This is a very pleasing outcome for Wool Equities and allows us to focus on developing the significant opportunities continuing to emerge from our key investment in Keratec."

Keratec is one of New Zealand's leading wool research and innovation companies.

AWTA managing director Michael Jackson said AWTA and NZWTA shared similar objectives and a strategic partnership in new technology development.

"When Wool Equities decided to divest itself of its investment in NZWTA the AWTA board decided it would be in the best interests of Australian and New Zealand woolgrowers to ensure the independence of NZWTA was maintained," he said.

Mr Jackson said NZWTA would continue to be managed as a separate New Zealand company, focusing its attention on the requirements of the local industry.

"However, the new arrangements will enable NZWTA to rapidly deploy new technology developed by AWTA and take advantage of the productivity improvements this will provide," he said.

Australian woolgrowers are also expected to benefit from the new ownership.

"It will enable AWTA to reduce the unit costs of any new technology," Mr Jackson said.

"In the longer term there are obvious advantages to both companies in reducing other operating overheads.

"Our clear view is that this structure will best serve the ongoing needs of the New Zealand and Australian wool industries."

Earlier this year the AWTA board decided against increasing raw wool testing fees for a fourth consecutive year.

"The budget has been formulated in an environment where wool production levels are flat, with the risk of some reduction depending upon seasonal conditions," Mr Jackson said.

"Consequently, AWTA must continue to focus its efforts on improving efficiency at all levels."

Meanwhile, a modest shorn wool production increase in the eastern states is expected to be counteracted nationally by WA's below-average season.

AWTA tested 3.2pc less wool by weight for the 2005-06 season, while an analysis by the Australian Wool Exchange indicated a 4.3pc decline year-on-year.

Overall, the 2005-06 production estimate is 3.5pc lower than the 2004-05 season.


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