Currently nearly all NZ Yarns’ sales are to carpet makers in Australia. This makes the business largely dependent on the state of the building cycle in Australia and an over exposure to the AUD:NZD currency cross rate.
Therefore, NZ Yarn has a clear strategic imperative to not only grow sales with existing customers in Australia but to actively grow sales in North America. In August and September, we visited 11 target customers in the USA, almost exclusively in the luxury end of the residential and commercial carpet and rug sector.
As a result, we entered into a comprehensive sampling program with 10 potential customers, this has now progressed to five “scale-up” production trials which we anticipate will lead to sampling and launch stock orders and ultimately ongoing commercial yarn supply.
Concurrently we’ve been busy developing new products based on differentiated yarn systems, our focus is on innovative yarns that show case wools’ natural attributes, produce simply stunning carpets and rugs that is difficult if not impossible for competitors to replicate.
Developing new products and new markets take time and patience, this is especially true for carpets which are essentially “slow moving durable goods”. So we are obviously delighted with the progress we have made over the last five months in the North American market.
We are expecting these international business development initiatives to gain traction during quarter three (January-March) and we’ll keep you posted with progress early in the New Year.
December 12, 2016