NEW wool market and processing opportunities will be explored with a $662,000 Federal Government grant to peak grower body WoolProducers Australia.
The grant is part of the Australian Government’s Agricultural Trade and Market Access Cooperation (ATMAC) program and will enable WoolProducers to assess the feasibility of new markets and processing in Australia and overseas.
Minister for Agriculture and Northern Australia David Littleproud said the grant would have help identify new opportunities for the Australian wool industry.
“Currently, the bulk of Australia’s wool clip is exported to and processed in a small number of markets.
“If there’s one thing the global pandemic has taught us, it’s that market diversification is important for healthy industries,” he said.
“By looking for alternative markets for our wool, we can make sure we aren’t falling into the trap of putting all our eggs in the one basket.
“This grant will examine the feasibility of bringing back early-stage processing of greasy wool in Australia,” he said.
“It will also examine the feasibility of early-stage processing in offshore locations, providing our wool producers with new markets.
“It could also mean investment into manufacturing, greater job opportunities in our regions, and a chance to value-add to our wool before export.”
About 84 percent of Australian wool sold this year was shipped to China for early stage processing and 99pc was greasy wool. Australia currently has three early stage processors. These included Laverton carboniser, Victoria Wool Processors; the E.P. Robinson scour in Geelong and Michell Wool’s scouring and carbonising plant in Adelaide.
WoolProducers chief executive officer Jo Hall said the grant was an opportunity to develop and diversify the wool market.
“Australia is the world’s biggest exporter of wool, and the quality we produce is the best in the world.
“There are 60,000 wool producers in Australia, and 200,000 people employed by the domestic wool industry supply chain,” she said.
“This is a chance for us to sustainably grow the industry through investigating ways to pivot to other markets.”
Michell Wool welcomes federal support
Michell Wool executive director David Michel said Australia’s oldest and largest wool processor, welcomed the Federal Government announcement.
“We believe it makes sound business sense to actively explore options for value-adding, including the development of early-stage wool processing capacity, both here in Australia and in other parts of the world, with the intent of increasing competition and ultimately delivering higher returns for growers.
“As a proud Australian family company with a solid 150-year history in the Australian wool industry, we would be delighted to see a return to early-stage domestic processing and believe we would be well-positioned to play an active role in that, bringing our decades of experience to the fore,” he said.
“Michell Wool has a strong track record in this space, and we would be excited to play a role in partnering with government, WoolProducers Australia, growers across the country, and customers to help drive innovative solutions to ensuring a sustainable Australian wool industry for future generations.”
Mr Michell said Michell Wool runs a highly sophisticated processing plant in Salisbury, Adelaide and believe there’s a real opportunity to re-establish domestic early-stage processing by embracing modern manufacturing processes including automation, as well as efficiencies in energy and water usage.
“By expanding market access opportunities, effectively creating more competition for quality Australian wool products, there would be beneficiaries right along the supply chain, as well as the generation of additional jobs and economic activity.”
Mr Michell said Australia’s current annual early stage wool processing capacity of under 20 million kilograms needed to be expanded to at least 100 million kilograms to be relevant.
Feasibility study could benefit processing plans
There are currently several projects aimed at early stage processing in Australia, including at Blackall in Queensland, Kangaroo Island and in potentially in Victoria, with some linked to tourism development.
Ms Hall said the $662,000 grant will be used to investigate the feasibility of establish early stage domestic processing from a national perspective, but potentially underpinning the planned domestic developments.
“Everybody loves the idea of processing wool in Australia, we want to find out if it is feasible and what barriers there are to its re-establishment here.”
The project would also look at increasing the capacity of existing processing hubs offshore, she said.