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New Kailis, Paspaley alliance

THE two leading players in Western Australia’s $200 million a year pearling industry last week entered into a long-term strategic arrangement to expand their exclusive south sea pearling operations. The alliance between Fremantle-headquartered MG Kailis Group and Darwin’s Paspaley Pearling Company is a broad-based arrangement aimed at growing the market for Australian pearls in export markets, and increasing production efficiency. The industry employs more than 2,000 people in the state. This comes after the Western Australian and Northern Territory governments signed a Memorandum of Understanding earlier this month that agreed to have south sea pearl production managed on a whole-of-industry basis. MG Kailis and Paspaley will consolidate and share a range of infrastructure, service and technology aspects of their operations, but both groups will remain independently owned and continue to be involved in all aspects of pearl farming. There will be no change at a consumer level, as both groups will continue to market pearl jewellery independently under their existing, well-established brands. In combination, the two companies control around 55 per cent of the annual pearl quota, Paspaley with 36 per cent and MG Kailis, the second largest producer of cultured Australian South Sea pearls, with 19 per cent of the quota. The MG Kailis Group was established in 1962 as a rock lobster operation in Dongara in the Mid-West, and is now involved in all aspects of seafood industry – offering lobster, prawns and Southern Bluefin Tuna to international and domestic markets. It entered the pearling industry in 1975 through its subsidiary, Broome Pearls Pty Ltd, and now farms at a number of locations in and around the Broome-based Kimberley pearl industry. In 2002, the company launched its own premium retail pearl brand, Kailis Australian Pearls, with retail outlets in Fremantle and Broome. Selected collections are carried by retailers in Spain, Sydney and Perth. It has also established significant wholesale markets for its pearls around the world. The group also has a long history in boat building and design, with more than 60 vessels operating throughout Australia. Its engineering division has built more than 100 trawlers, tuna vessels and barges, and each year handles about 70 vessel refits. Paspaley operates about 20 farms in a similar area to Kailis, extending from the Cobourg Peninsula north-east of Darwin to Dampier in WA. The isolated bays in the area offer protection from seasonal cyclones and provide quality pristine waters ideal for the rare giant Pinctada maxima oysters that produce the south sea cultured pearl. Most of Paspaley’s pearling operations are conducted on the water, but they also harvest pearls from land-based farms, such as the well known Kuri Bay farm. The company supplies leading jewellery houses around the world, including Tiffany & Co, Cartier and Harry Winston, and has offices in Hong Kong, Tokyo and, domestically in Sydney and Darwin. Paspaley, like Kailis, has also diversified into different businesses, including aviation, ship repair and engineering, which initially developed out of infrastructure required to support the pearling business. It has also expanded into agri-business with wine and beef farming activities.

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