Summit Wool Spinners in Oamaru is to be sold to Canterbury Spinners Ltd, a subsidiary of the carpet manufacturer Godfrey Hirst.
The sale of the woollen mill, owned by the Japanese company Sumitomo Corporation, is subject to consultation with employees and unions.
“Sumitomo has made a decision to sell Summit. This was driven by a number of factors affecting trading results including an unfavourable exchange rate and less local demand for wool carpets. International demand for woollen carpet yarn has also been affected by the Global Financial Crisis,” said the managing director of Summit, Mr Harry Ogawa.
“From Sumitomo Corporation’s perspective, Summit was becoming isolated from the parent’s overall global textile business.
“Summit employs loyal and skilled people and produces top quality yarn. Unfortunately demand for good wool yarn to be used in carpet and rugs have fallen resulting in a difficult trading time,” he said.
The mill is one of Oamaru’s biggest employers but it’s future has been uncertain for some years.
Wool carpets face strong competition in international markets and demand has been hit by the GFC.
The loss of nearly 200 jobs is tough for the workers, it will also have an impact on the town.