THE business of SA-based wool broker, private buyer and exporter Quality Wool has leap-frogged by more than 40 per cent with its acquisition of NSW, Vic and Qld wool broker Western Wool Marketing.
The deal is expected to be completed later this month, subject to customary conditions.
It will affirm Quality Wool as one of Australia's largest, independent, family owned and operated wool companies.
Its brokering and private buying business is set to grow by about 55,000 bales to 135,000-140,000 bales, giving it a 10pc market share on the eastern seaboard.
Quality Wool managing director Mark Dyson said the buy was a strategic fit with its existing operations, extending its network in Vic, NSW and as far afield as Longreach in Qld.
"While we are both in the brokering industry we don't compete at the farm gate," he said.
"WWM are based in western and eastern Vic whereas we were already in Geelong, Bendigo and Benalla. We also have always been strong in the pastoral areas of NSW but they are mainly based in central and northern NSW."
Quality Wool has company-owned stores at Port Adelaide, Naracoorte and Jamestown, as well as Geelong, Bendigo, Ballarat and Benalla in Vic.
It will add WWM stores at Parkes, Wagga and Orange in NSW and Vic stores at Horsham, Edenhope and Yarram.
Mr Dyson said Quality Wool would also pick up economies of scale at its Melbourne selling facility in testing and showfloor costs.
The acquisition is expected to expand its staff by 20 to 30.
"We have a really stable team of employees and the WWM team is stable too. We can put them together under the Quality Wool banner and have a really strong network to service our clients," Mr Dyson said.
He said while agriculture was embracing new technologies rapidly, interactions between brokers and clients were essential.
On the wool market, Mr Dyson said a more balanced supply and demand equation was delivering much-needed price stability.
"The commodity market for wool is strong, especially the carding market and crossbreds. Crossbred wool is as strong as it has been for a long time, if not history," he said.
"There is only the fine category which is struggling in recent years. Between 19 micron and 23M, there is only a 60 cents a kilogram gap, which reflects the market wanting those mid-micron ranges."
Emerging markets such as Vietnam, a low-cost processor, would reduce China's dominance of the Australian market.
WWM was owned by Qld Cotton, a wholly owned subsidiary of Olam Australia.