Carpet maker rolls out more optimistic future
Damage caused by Cyclone Gabrielle to Bremworth's Napier plant resulted in severe capacity constraints for the carpet maker and a poor half-year performance.
However, chief executive Greg Smith says the move could also open the door to cheap imports from the United Kingdom.
He says the coalition announcement, where government agencies will be required to select woollen fibres over synthetic alternatives in their buildings, is significant. But Smith warns that it also has the potential to benefit sheep farmers overseas at the expense of their New Zealand counterparts.
He believes greater clarity is needed to understand whether the intent of the decision is to support New Zealand’s rural economy, reduce the use of plastic materials in construction or both.
Smith claims the move has the potential to double the price of wool farmed in New Zealand but a question remains as to where a government-specified product would fit within free trade agreements with other countries.
He says that while New Zealand wool is generally considered to be suitable for carpet production by international manufacturers, the new policy may see volumes of cheaper imported options become available here. Smith adds that if government procurement policies allowed for imported wool fibre building products to access the New Zealand market, there would be few benefits for New Zealand other than a reduction in the use of plastic.
“It would be soul-destroying for farmers in the sector to see one imported product replaced with another in the construction of publicly-owned buildings,” Smith says. “What we need right now is greater clarity around the parameters of this policy and recognition of the inherent tax benefits to the economy when we support local,” he says.
