10 Mar 2009

Restructuring approved in wool scouring industry

6:46 am on 10 March 2009

The Commerce Commission has approved a restructuring proposal that will merge the ownership of some wool scouring facilities and reduce the capacity by about a third.

It clears the way for Auckland businessman Mr David Ferrier or his company to buy the scouring and dumping assets of Godfrey Hirst New Zealand which operates scours near Napier and at Invercargill.

David Ferrier is also proposing to buy all the shares in Cavalier Wool Holdings, which runs scours near Napier and Timaru.

The plan is to close Godfrey Hirst's Invercargill scour and reduce its Clive operation to one line.

The commission says it's satisfied that the arrangement won't substantially reduce competition.

It says the merged operation will have to compete with New Zealand Wool Services International, which runs scours near Hastings and Christchurch.

It also has to contend with the buyer power of wool merchants, who are the major users of wool scouring services.