Commerce Commission approves merger of scouring assets
27 March 2014
The Commerce Commission yesterday issued its draft determination, approving the merger of the scouring assets of 50%-owned Cavalier Wool Holdings Ltd (CWH) and New Zealand Wool Services International Ltd (NZWSI). The Commission will allow a period for formal submissions from interested parties after which it will issue a final determination.
The Directors of CWH believe that the interim decision confirms their view that the merger is in the best interests of the New Zealand wool scouring industry.
Cavalier Corporation Managing Director Colin McKenzie says the merger will create synergies by taking out excess capacity in the industry and lead to improved profitability. The decision comes as the price of wool grease is beginning to recover.
“It is opportune for Cavalier Corporation, as we deliver on a range of measures to turn the business around.”
He says the merger is part of a matrix of changes the Cavalier Group of companies has been working on that will deliver measurable improvements to profitability:
“We have been working closely with Deloitte on a three-year strategy and this has been a fruitful process for us as we fine-tune our plans for the business."
Among the initiatives is an extension to the alliance with Mohawk which has already opened up an important US market for premium wool carpets and provided an exclusive distribution arrangement for Mohawk carpet tiles in Australia. As a result of this, Ontera now has the most extensive tile offering in Australia. Another is the ongoing roll-out of the premium Habitat Collection and other synthetic ranges, which has advanced to the point where synthetics account for almost half of the total carpet production. The company continues with its programme to reduce debt.
Managing Director and CEO
For and on behalf of the Board of Directors