Home » Calcot, SWIG agree to consider combining cooperatives

Calcot, SWIG agree to consider combining cooperatives

Jun 8, 2006 6:18 AM

Two of the nation’s oldest cotton marketing cooperatives have agreed to explore the possibilities of combining operations.

The boards of directors of Calcot Ltd., headquartered in Bakersfield, Calif., and Southwestern Irrigated Cotton Growers, based in El Paso, Texas, have signed a non-binding letter of intent to examine the benefit of joining forces.

SWIG, established in 1926, currently represents cotton producers in New Mexico, far western Texas and eastern Arizona. Calcot, founded in 1927, is owned by members who farm in California, Arizona and south Texas. The vast majority of sales for both cooperatives are to overseas markets, and the Far Western states produce similar styles and qualities of cotton.

The SWIG board approved the letter of agreement on May 10. Calcot’s Board of Directors gave its assent at its board meeting May 18.

Details of the letter are confidential, and no timeline for any outcome was made public, but chairmen of both cooperative boards said the idea has considerable merit.

“This proposal has great potential for both organizations,” said Charles A. Fanucchi, cotton producer and chairman of the board of Calcot. “This would increase cotton supplies and styles for our customers and allow us to gain greater efficiency in our excellent marketing, warehousing and delivery systems.

“As cotton producers, we’re always trying to find the best ways to produce and market our products. Cooperative members already know the tangible benefits that come from working together, so I believe this discussion could be an excellent opportunity to be a ‘win-win’ for everybody.”

SWIG chairman Keith Deputy added, “Today’s worldwide economy and the United States’ cotton industry’s reliance on exports, combined with a difficult farm economy, requires forward thinking and sometimes bold action in order to remain competitive.

“Combining the operations of SWIG Cotton and Calcot Ltd. would make every cotton producer from far western Texas to California more competitive. This would indeed be a ‘win-win’ situation for all concerned.”

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