SA wool farmer's body to raise R500mn through public issue

30 Mar '13

2 min read

Aiming to boost its presence in the domestic as well as international wool market, the South Africa (SA) based Konsortium Holdings plans to raise R500 million through a public issue of shares.

The company is offering 10 million shares of Rs. 50 each. The company already has 130 farmers as its members, while several others have articulated their interest in subscribing to the public issue, Konsortium CEO Braam Coetzee said.

The sum raised through this issue will be used by the firm to acquire and/or lease farms and livestock, and to boost its farming activities. The company aims to capture a 20% market share of the Merino market in SA by 2022.

With widening economy of scales and commercialization of the farming business chain, farmers no longer remain to be price takers; rather they are now in a position to set their own prices for their produce.

As one of the oldest agricultural industries of South Africa, wool industry is a major foreign exchange generating sector for SA economy. Eyeing to make the most of the industry’s strength, Konsortium Holdings has engaged wool marketing firm Segard Masurel to help it earn a global presence, Mr. Coetzee said.

Wool production is undertaken in majority of the parts of SA, however it is widely done in drier parts of the country like around 25.1 percent of the country’s overall wool production is produced in the Eastern Cape, 24.1 percent in the Free State, 19.9 percent in the Western Cape, 12.5 percent in the Northern Cape, 7.7 percent in Mpumalanga and the rest in other regions.

As per estimates, around 90 percent of the wool that SA produces is predominantly shipped to Germany, Italy, UK, France, Japan, Taiwan, South Korea and China.

Fibre2fashion News Desk - India