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Elders wool to cease international operations

12
Dec '08
The international wool processing arm of the Elders wool business, BWK AG, will cease business at its mills in Bremen (Germany) and Turkey following an announcement this week by Elders' parent company, Futuris Corporation.

The company will be scaling back its wool processing business to enable greater investment and resources to be directed to core client services.

Elders Rural Services Managing Director, Mike Guerin, says the move away from European processing aligns with Elders' recent transformation program, focussing the Elders business at core agricultural markets and grower clients.

Elders' processing facility in Nanshan, China, will remain in operation as a core strategic partner as Elders continues to seek increased opportunity in Asian markets where the vast majority of Australian wool is exported.

“The greasy indent supply business is a valued area of our wool business. Elders will continue to operate in the greasy indent market providing our grower clients with unique access to international markets and marry their supply with the demand from our Asian partners,” said Mr Guerin.

“Local growers in the communities we seek to serve are the cornerstone of the Elders wool business. Aligning our resource investment into our grower relationship and regional Australian networks is at the core of the Elders wool strategy.”

Mr Guerin said “Elders' move to divest the BWK processing operations in Germany should be seen as a positive realignment from the Elders wool business. The decision to divest the German mill reflects the underperformance of BWK Germany as a business unit and will not have an adverse impact on our grower clients as we move away from non-competitive operations.

“The cost to process wool in Europe in the current market is just not a viable option for us. The BWK processing investment in China will remain due to the industry competitive cost structure of the processing plant and its geographic relevance to the Australian Elders wool business as does the Elders wool international business of indent buying.”

The decision to exit European wool processing coincides with Futuris' “Agenda for Change” announcements that will see a stronger focus on core primary producer markets and divestment in non-core ancillary investments.

Elder's


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