‘New generation’ urged to start R&D revival

14 May, 2015 02:30 AM
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Michell Wool chief executive Steven Read says the profitability of woolgrowing is enticing a new generation into the industry.
Michell Wool chief executive Steven Read says the profitability of woolgrowing is enticing a new generation into the industry.

MICHELL Wool chief executive Steven Read sees a bright future for the Australian wool industry with a "changing of the guard".

A guest speaker at Australian Wool Innovation's National Merino Challenge in Adelaide last weekend, he is excited that the increased profitability of woolgrowing is drawing-in a "new generation of talented and innovative people" across a diverse range of wool careers.

He says they are proving better at telling the good story behind wool than those with decades of experience in the industry.

"The wool industry is a $2.5 billion export business with 99 per cent of wool exported across the world, and while most people are on the wrong side of 50, most of the companies are privately-owned and nimble, not foreign-owned corporate companies - so the environment is right for a new generation to come in and pick up from where we leave off," he told nearly 100 young participants at the event.

"You look at things differently, you challenge what is happening at the moment - global marketing, and how you sell is all changing to online. It will keep people like me on our toes and challenge our company too."

During his presentation Mr Read shared his journey from jackaroo to chief executive of one of Australia's three remaining early stage wool processors.

He said his more than 30 years in the wool industry had been hugely rewarding and enabled him to travel to more than 25 countries.

Michell Wool - a family-owned company in Adelaide - was founded in 1870 and has factories at Salisbury and Suzhou in China.

Despite his enthusiasm for the natural fibre, Mr Read said there were challenges which needed addressing, including the almost "non-existent" research and development in wool processing

"We did have CSIRO and four or five processors all doing their own research but with the shrinking wool clip this has all gone," he said.

Mr Read said transforming wool into woollen fabric was one of the most expensive textile transformations - comparable to silk and cashmere.

"Why should it be three times more expensive to dye wool compared to dying cotton?" he said. "And why is it between carding and combing, wool must go through three gilling machines each worth $500,000? Why can't we do it all with one machine?"

Over the past few decades companies had opted to relocate their processing to low cost-of-production countries with poorly skilled, low-paid workers instead of finding other ways to remain competitive.

This was coming to an end as global consumers demanded sustainable environmental practices and wages in developing countries rose.

"Wages have risen 15pc in China in the past year for factory workers and the environmental standards we must abide by in China are the same as our Australian factory," he said.

Future gains would instead be in innovation, automation and more efficient transformation - and he encouraged woolgrowers to ensure this was an AWI-funded priority.

The industry's complex ownership-exchange structure was holding it back and he welcomed the AWI-funded wool selling system review.

"To extract the most value for woolgrowers we need to divide up the clip with all different wool types and ensure they are offered to different end-users covering all markets and parts of the world via some sort of clearing house - whether that is an auction system or electronic sale by description for some wool types with quality assurances, or indeed some other system altogether, should be open for debate," he said. "We also need more selling days, which comes from centralised selling."

All woolgrowers should get more involved in their industry beyond the farmgate by taking mill tours and building relationships with processors.

"It is easy to sit at the farmgate and say someone else is not paying me enough, but by having a better understanding of what the market needs and the difference between the combing and carding markets, currencies and other factors, you can make better decisions in a tremendously volatile market."

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Stock Journal
Catherine Miller

Catherine Miller

is Stock Journal's livestock editor and South East correspondent
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READER COMMENTS

Hear Hear
15/05/2015 11:28:13 AM, on Stock & Land

What a great article. Wouldn't it be great of someone like Mr Read was in charge at AWI? Imagine the progress we could make with a forwarding thinking executive like him.
Jock Munro
1/06/2015 4:40:15 AM, on Stock Journal

Australian wool growers need a co operative wool selling arrangement whereby they take control of their product instead of allowing merchants to run the selling system. Several submissions to the wool selling systems review have recommended this course of action.

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