Wool Equities Forges New Wool Industry Alliance


Press Release


Christchurch, New Zealand
October 28, 2010


Wool Equities Limited has today announced a new formal alliance with two other partners in the wool industry which is designed to modernise the manner in which both processed and unprocessed wool is sold in New Zealand.


For over 100 years the "open cry" auction system has been used for the sale of greasy wool, but in recent years this system has been increasingly expensive to wool growers, slow to execute, and has provided inconsistent results for wool sellers.


This move by Wool Equities Limited takes a leadership position in supporting the Minister of Agriculture's Wool Taskforce Key Recommendation 4 - "PLAY THE GAME HARDER. The sector needs to be as efficient as possible and drive supply chain optimization"


Wool Equities has partnered with Wool Connextions Limited and Wool Online Limited to support a new sales system that completely bypasses the antiquated open cry auctions, and which uses 21st Century technology to improve wool logistics efficiencies and improve wool returns to growers.


Wool Online is a new internet-based wool sales system which has been designed and developed by Wool Online Limited, a private joint venture company formed by Wool Connextions Limited, a Canterbury-based Wool Facilitator and Appraiser, and Golden Micro Solutions Limited, a Marlborough-based software development company.


The new system has proven itself very robust over the last 18 months of live testing. With sales of over 90,000 bales transacted already, and consistent pre-auction valuing of wool by Wool Connections Limited, the system has gained the confidence and full support of all major wool exporters and all 32 WoolFirst merchants in New Zealand.


Wool Online is very simple for wool merchants and exporters alike to use. Now that most New Zealanders are conversant with selling and buying on internet auction sites, the concepts of electronic trading are no longer foreign. With the potential to trade wool 5 days a week, the time required to sell clips can be dramatically reduced. Wool Online is capable of selling not only greasy wool, but also slipe and processed wool.


Wool Equities Limited role in the new alliance is to encourage the rapid acceleration of the uptake in use of this revolutionary e-Commerce auction/tender system. Wool Equities' 7,800 wool grower shareholders will all be encouraged to participate by selling their wool clip through the new system.


Wool growers have told us the costs they have to pay to sell their wool through the open cry auction system vary considerably from $40/bale to $80/bale.


In comparison, when growers request that their local WoolFirst merchant to sell their wool clip through the Wool Online auction system, costs will be around $30/bale.

Projected savings to New Zealand wool growers based on typical auction selling costs on latest auction volumes of 550,000 bales will be a minimum of $16.5 million. And all of these savings are made without increasing the purchase price of wool, and without the requirement for growers to be locked into a pre-determined sales contract.




For further information:


Keith Cowan, Wool Equities Limited, Ph +64 3 347 9064