JANDAKOT Wool Washers is the only first stage processor in WA.
The state of the art wool scouring factory in Rockingham works on commission for wool buyers.
It washes greasy wool, packs it in 450kg bales and ships to mills in Australia and around the world for combing.
Operations manager Allan Miles said the factory was operating well below capacity and management was concerned about the future of the WA wool clip.
"It is a quiet time of the year but volumes are well down on the past couple of years," operations manager Allan Miles said.
"There are a lot of factors - the wool clip has dropped 23pc in the past couple of years and there is a lack of demand for the product. The price of the product is also an issue.
"Working at maximum capacity - 24-hours, seven days a week - we could process 25 million kilograms of wool annually.
"We went through a restructuring process last year and we would like to see an improvement of 6-10pc in the next financial year."
If pollution became an issue around the world, Australia's gas-fired, energy efficient factories were likely to attract more work.
But while labour and water was cheaper in developing countries, much of the processing would go offshore.