Primary Wool Co-operative has launched a capital raising bid to buy a Christchurch yarn spinning operation out of receivership.
Christchurch Yarns, which makes yarn for wool carpets, was put into receivership in March but has continued processing on a reduced scale to fill orders.
The Primary Wool Co-op, through a new company, NZ Yarn, plans to raise $3 million to $5 million from wool growers and other investors by 19 September.
A director of Primary Wool and NZ Yarn, Hamish de Lautour, said the Christchurch mill is an important processor of New Zealand wool and has overseas customers who depend on it .
"The Christchurch Yarns business is now the only serious, independent carpet yarn spinning facility in the southern hemisphere and a range of independent carpet manufacturers rely solely on it for their woollen yarn," he said.
"Without Christchurch, they've simply got nowhere else to get their yarn. They're not interested in sub-quality, unreliable yarn from other parts of the world, Asia particularly, so if they were going to continue making carpet they would be 100-percent synthetic and there would be one less avenue for wool to be used. So, in our view, it just has to stay open."
Mr de Lautour said the operation has the capacity to produce up to 50 tonnes of carpet yarn wool a week, mostly for export to Australia and the US.
"It's certainly not doing that right now. While it's in receivership it's still been operating and trading on a skeleton staff , if you like, but they're very good staff, they've been very efficient, and they're just idling away at about 20 tonnes a week."
Primary Wool Co-operative is also proposing to buy a stake in the farmer-owned Wool Equities company, which runs Bruce Woollen Mill in South Otago.