WoolProducers’ $662,000 study to examine whether domestic wool processing is ‘feasible’ for Australia
WoolProducers Australia has been handed $662,000 to investigate whether early-stage greasy wool processing could be brought back to Australia.
Federal Agriculture Minister David Littleproud announced the project on Monday, saying COVID-19 supply chain disruptions had highlighted the need for “market diversification”.
WoolProducers plans to use the funding to explore new markets and early-stage processing options both for domestic and international for Australian wool.
Australia is the leading global supplier of wool and the world’s largest wool export nation, producing 39 per cent of global wool exports.
Its total wool exports in 2021 was 328mkg at a value of $2.75 billion.
The two-part project has been be funded by the Australian Government’s Australian Trade and Market Access Cooperation program.
WoolProducers Australia chief executive officer Jo Hall said there was “strong appeal” to reinvigorate early-stage wool processing on home soil but it needed to be “feasible”.
“(Domestic processing) ticks so many boxes, including regional jobs, emergency animal disease risk mitigation, market diversification and adding pre-export value to our agricultural products to name a few,” she said.
“We identified early on in the process that the critical choke point in wools long supply chain is early stage scouring, carbonising and top-making, so we focused our energies on seeking funding to thoroughly assess this proposition.”
The project will kick off with an economic assessment of domestic processing before examining processing capacity in diversified onshore and offshore locations.
Ms Hall said WoolProducers would release a tender in coming months for independent consultants to carry out the study.
The consultants’ work would be guided by a steering committee comprised of members of the Australian wool supply chain.
“The feasibility study will not only be looking at the potential economic benefits of domestic processing, but also what barriers exist in re-establishing this sector, including things like energy and labour costs, water availability and innovation opportunities to address these barriers,” Ms Hall said.
“This will include assessment of tariff and regulatory barriers and integration with other textile supply chain operations.
“It will also explore opportunities to split early stage ‘wet’ and ‘dry’ processing between domestic and offshore locations.”
Mr Littleproud said the COVID-19 pandemic had demonstrated that “market diversification was important for healthy industries”.
“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,” he said.
“It could also mean investment into manufacturing, greater job opportunities in our regions, and a chance to value-add to our wool before export.”
WoolProducers’ project has been called ‘Ensuring a Sustainable Australian Wool Industry Through Market Diversification and Risk Mitigation’.
Ms Hall said WoolProducers started looking into an early-stage domestic wool processing concept late last year and had put enormous effort into securing the grant.
Currently, Australia’s largest wool scouring and carbonising plant, Victoria Wool Processors, continues to be operational in Victoria, processing 3 per cent of the country’s wool clip.
WA’s last wool scouring plant Jandakot Wool Washing shut up shop after 77 years in 2009, as China started to ramp up its more cost-effective wool scouring facilities.
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