Business Description:
Namoi Cotton Co-Operative Limited (NAM) is a cotton processing and marketing organisation. The company has a network of ginning, marketing and logistics operations throughout the cotton growing regions of New South Wales and southern Queensland in Australia, while also being represented internationally with an office in Jakarta, Indonesia. As part of its business operations Namoi Cotton owns and operates warehouse facilities in Wee Waa, Warren and Goondiwindi in Australia.

Strategy Analysis:
Operationally NAM had a good financial year to February 2002. Ginning and marketing generated a profit before the bad debt provisions of $15.4m, up from $3.59m the previous year. Local ginning throughput increased 3% to 868,022 bales although marketing declined 11.1% to 974,053 bales. The marketing area is highly competitive and will probably see rationalisation over the next two years. NAM has had to contend with industry issues such as water availability and low cotton prices along with the bad debts which mainly occurred through the growers doing their own currency hedging. The ginning and marketing end of the industry could well be set for rationalisation. Namoi's strategy is now focused on geographic expansion in order to increase its market share of the Australian cotton crop. Management expect further growth in market share to be driven by organic growth and the February 1999 merger with Cotton Trading Corp (CTC), a privately owned cotton marketer based in Goondiwindi, QLD. Namoi acquired a ginning facility at Carinda in north-western NSW in 1999, increasing their annual ginning capacity to over one million bales. The acquisition coincided with the opening of a 75,000 bale gin at Trangie in the Macquarie Valley. Construction of a new Hillston gin was completed in May 2000.