Wool Processing

WoolProducers gets $800,000 grant for wool processing study

Sheep Central, March 27, 2023

WoolProducers has received $800,000 to continue its wool processing study.

PEAK grower body WoolProducers Australia has won an $800,000 grant to undertake the second phase in its study into developing domestic and early-stage wool processing.

WoolProducers today announced it is the recipient of a $800,000 Agricultural Trade and Market Access Cooperation grant to develop pathways for domestic and diversified early-stage wool processing.

Together with industry co-investment and the recently announced strategic partnership with AusHub, the total value of the project is almost $1.1million, WoolProducers said.

The grant funding allows further exploration of the findings and recommendations of the earlier report, “Ensuring a sustainable future for Australia’s wool supply chain” (Phase 1 report), that quantified the commercial feasibility and risk mitigation benefits associated with domestic and diversified early-stage processing of Australian wool.

Minister for Agriculture, Fisheries and Forestry Murray Watt said that the grant funding would enable the wool industry to identify pathways toward market diversification and mitigation of trade risks associated with tariff and non-tariff trade barriers, including the impact of an emergency animal disease incursion like foot and mouth disease.

“Wool requires dedicated early-stage processing before it can enter more generic textile manufacturing processes, but Australia’s limited domestic processing capabilities leaves our wool producers reliant on offshore early-stage processing,” he said.

WoolProducers general manager Adam Dawes said the Phase 1 report identified that early-stage domestic processing 50 percent of the wool that currently produced in Australia would deliver almost 600 FTE jobs to the Australian economy and reduce the annual peak impact of a Foot and Mouth Disease outbreak to the Australian wool industry by up to $1.1 billion.

“Domestic processing would also allow for pre-export value adding to Australian wool, with a potential Australian GDP increase of $1.8 billion,” he said.

The next phase of the project will identify pathways toward market diversification and the mitigation of trade risks associated with emergency animal disease outbreak, and tariff and non-tariff trade barriers. The project will road map the establishment of early-stage wool processing operations (scouring and / or carding and combing) in Australia along with 4 priority countries identified in the Phase 1 report; Bangladesh, India, Indonesia and Vietnam.

“WoolProducers is grateful to receive this funding, as it enables the recommendations of the Phase 1 report to be built upon, which established the feasibility of domestic and diversified early-stage wool processing on both commercial and trade risk management grounds,” Mr Dawes said.

“This next phase of work will inform the “what”, “where” and “how”, which will deliver a clear roadmap and finalise our investigations in this area on behalf of Australian wool growers.”

WoolProducers undertook the Phase 1 work with an industry steering committee comprising of representatives from Australian Wool Innovation, Australian Wool Exchange, Australian Wool Testing Authority, National Council of Wool Selling Brokers of Australia, the Australian Council of Wool Exporters and Processors, and Austrade.

AWI chief executive officer John Roberts said AWI is happy to work with WoolProducers and the Commonwealth to gain greater understanding of the economics of processing diversification.

“As the wool industry’s research, development and marketing company, we are glad to collaborate to further the interests of wool growers.”

A tender process will be undertaken in the coming months to engage independent consultants to conduct this study with the support of key industry experts. The work of the project will be guided by a steering committee in the same manner as was employed throughout Phase 1 of the project. It is anticipated that a final report will be developed by the end of 2023.

“We would like to thank Minister Murray Watt and the ATMAC program of the Department of Agriculture, Fisheries and Forestry, for providing the funding for this important work,” Mr Dawes said.


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  1. Johann Schroder, March 30, 2023

    Congratulations, WoolProducers. We export iron ore and import not just steel, but the products made from it. We export coal and what do we import in return? We export greasy wool and import finished fabric and garments. We evidently do this because it makes “economic sense”. Nobody seems to be concerned about the subtle skills seepage we suffer.
    One only has to look at the luxury cars on the roads and top-end appliances in kitchens and laundries to realise that Australians are not averse to paying for quality.
    Why are we afraid to produce quality wool products and ask the price they’re worth? Every step in the wool beneficiation process virtually doubles the value of the product. We can double our national wool revenue just by doing the scouring on-shore.

    • Peter Small, March 30, 2023

      Johann Schroder raises some good points and deserves a reasoned answer.
      First of all, it’s a wild assertion Johann that “We can double our national wool revenue just by doing the scouring onshore”. The process of scouring wool demands several key factors:
      1. Access to plentiful supply of cheap energy, preferably natural gas. Although Australia is the second biggest producer of natural gas in the world after Qatar, Australian gas is cheaper in Japan and China than it is in Australia. Australian gas is extremely expensive and is one of the reasons for the decline in scouring in Australia.
      2. Access to plentiful supply of soft water. The first thing anyone should do who is contemplating investing in establishing early-stage processing in Australia is to visit the location, book into the local motel and take a shower. If the water doesn’t easily lather go somewhere else. The investors in Austops at Parkes did not do this and Austops failed to make a good top until Roger Middlebrook arrived, realized the problem and introduced an expensive water softening plant, adding to processing costs in a very competitive industry.
      3. Access to skilled labor with a commitment to quality and detail. This is hard to find in Australia.
      But perhaps most importantly, scouring is the point that blending takes place, and careful blending needs to be alongside the top making and closely integrated with spinning. Good garments are made with quality yarn and that is determined by the selection of greasy wool and the way it is blended as it goes into the scour. If this was not so then the configuration of the industry driven by efficiency and quality would reflect that difference.
      You are quite correct to say, “Every step in the wool beneficiation process virtually doubles the value of the product”. But that merely represents the cost of that process and a return on investment. There is no money for jam at any point in the wool textile pipeline, I assure you.
      Australians as you assert will pay for quality, but they also demand value for money.
      Australia needs to concentrate on the things we are good at; producing quality Merino wool, and design and retail marketing. We do have excellent design skills with outstanding flare evident. They are the two areas we should concentrate on. Not this other nonsense WoolProducers has become engrossed in; mainly I suspect, because there is loose taxpayers’ money floating in the wind.

      • Janish Kumar, September 24, 2023

        Hi Peter,

        I find your reply to Johann’s point very intriguing. I have been trying to find specifics about Austop’s reason for failure. I assume you have some insights.

        Can we connect on Linkedin or something? I would love to learn more.

        Cheers mate

  2. Barry White, March 29, 2023

    A good place to start with this proposal is to review the many similar projects in the past, particularly in the 80s and 90s – and why most failed.

    Location of key markets (international), what products are involved (woolen, worsted, hosiery/knitting or weaving etc), sales force, technical, engineering and processing expertise, wool supply arrangements (‘farm gate’, private or auction) and total capital and operating costs (which will be much higher than those that have been released) are key considerations.

    This proposal lacks any real understanding of how the textile manufacturing pipeline works in reality. Early stage processing is just the start and the connection with downstream manufacturing customers is critical.

    For the record, much work was done previously (AWC/AWRAP) in market development in Indonesia, India and Vietnam. Each market required in-depth understanding of the market, the manufacturing structure, competition (other fibres, that were dominant) and much more in determining the competitive potential for processed wool supply from Australia in the various environments. They are all different. Understand the market. This requires much greater textile processing and marketing expertise than is evident in the proposal so far.

    It’s one thing to be passionate, but this requires a balanced ‘clear eyed’ view of what is involved. In many respects, building a processing plant will be the easy bit. Particularly if it’s State-funded.

  3. Andrew Farran, March 28, 2023

    Before the promoters of this underdeveloped idea proceed further they might have a close look at past experience with a similar project in the 1980s – that of Australian Topmaking Services and its then state of the art plant in Parkes, New South Wales.

    In spite of enthusiastic private investment and a generous Labor government grant it couldn’t compete and survive in the global market. It was not helped by high local labour costs and unrealistic trade union expectations. More to the point were the expanding processing and latter stage plants in China with their relative efficiencies and competitive advantages.

    Another view was that ATS sourced its wool through the auction market rather that directly from selected growers with more control over costs. More to the point is that top making here was too remote from downstream users where proximity in itself facilitates mutuality over product specifications.

    Where then is the evidence that market and production tides have reversed significantly since the earlier Australian experience to make top making here viable? Wasn’t one white elephant of this nature enough?

  4. Alistair Watson, March 27, 2023

    This a travesty of public administration. Economic logic and bitter experience establishes that prospects for wool processing in Australia are limited. Some factors favour processing close to the point of production, and some close to the point of consumption. Wool is a case of the latter. The limited possibilities of further processing are in any case the domain of the private sector. Of course, there will be a queue a mile long to spend this extravagant grant.

    • Peter Small, March 27, 2023

      Well said Alistair, but will anyone have the wit to listen?
      How far have we travelled since wise members of Parliament like the Labor Senator for Western Australia Peter Walsh, and Bert Kelly, the Liberal MHR for Wakefield tediously argued against subsidies and protection for industry. We have now turned 180 degrees. With today’s inept industry leaders and a less than adequate Federal Minister, pissing taxpayers’ money up against the wall is the main game in town. What will be next? With history either never learnt or easily forgotten, how about another go Woolproducers at a reserve price plan for wool?

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