Wool revival seeks supply for Italian style production

02 Nov, 2017 04:00 AM
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Francesco Botto Poala, joint CEO of the Reda mill at Crocemosso says the future for fine wool cloth and a new line of sports-leisure wear is bright, and they are looking to secure the right kind of supply from Australia.
Francesco Botto Poala, joint CEO of the Reda mill at Crocemosso says the future for fine wool cloth and a new line of sports-leisure wear is bright, and they are looking to secure the right kind of supply from Australia.

In the valleys above Biella in Northern Italy’s Piedmont region there is abandoned industrial factory space begging for revival.

After the Global Financial Crisis of 2008-09 thousands of employees were laid off and prosperity took a backwards step, with wool production suffering as a result.

From the ashes of this crash has risen a wave of optimism, especially in the village of Crocemosso, where the Reda factory – employing 400 people – is recording double digit growth in both the new fabrics for ‘next-to-skin’ wool sports-leisure wear and its traditional woven suiting fabrics. Today 35,000 metres of cloth are produced each day or eight million metres every year.

The Botto Poala family’s involvement wool can be traced back to 1865. Today they retain a commitment to the valley where their Reda factory is located. They also have embraced change. Where once the Board was all family, today it comprises outside experts in a variety of specialist fields.

An new line of technical fabrics labelled Reda Active, some of it incorporating Cordura for resilience, is designed for products outside the realm of tradition: Shoes, ski boot and helmet linings, waterproof fabrics and other performance wear. All the properties of wool that make it such an amazing and natural fibre are retained in all these products. The current strong growth and a belief by the family in these products are the reasons why Reda is committed to a $50m Euro investment over the next five years.

The Botto Paola family have also taken the leap-of-faith to become wool producers themselves, and now own three farms in the South Island of New Zealand, running 30,000 sheep which produce exactly the type of wool required by the company. However, the quantity coming off the Mackenzie and Otago country provides only five days’ worth of production back in Italy.

To secure their future Reda has invested in vertically integrated supply, signing 3-5 year contracts with 95 producers in New Zealand. The New Zealanders have had more experience with contract relationships over the past decade, embracing the chance to partner with Reda.

South Africa and South America, meanwhile, cannot provide the quality of wool required, despite the hype. Australia holds the key to supply, currently providing 85 per cent of Reda’s requirements. The Australians are catching on fast and 20 specially selected farms have now signed the exclusive 3-5 year deal offered by Reda which offered premiums 15-35 per cent above the auction market in the first year.

The price also moves based on a special index developed to protect both the grower and Reda. Selected partner growers in both countries must also prove sustainability and animal heath credentials, as demanded by an increasing number of European brands and consumers.

The market for Australian and New Zealand superfine wool has achieved a 40 per cent year-on-year rise, with the product now at the point where buyers like Francesco Botto Poala and his cousin Fabrizio say that some customers are finding the cost difficult to pass to the final market. “Manufacturers of knitwear can cut costs by blending with acrylic, but when it comes to Italian style suits, only the highest quality Merino will suffice – and we will not compromise on quality”, said Francesco.

An issue that concerns the whole of the manufacturing sector in Biella, not just Reda includes the move towards sheep genetics in both New Zealand and Australia that delivers a fleece with a bolder crimp with excessive staple length. To counteract this, the Reda’s premium contract prices hope to encourage growers to produce wool in the 16-19 micron range with a fine crimp structure, a strong staple of length 75-90mm and with backs and necks removed to improve evenness of each sale lot.

Other issues revolve around the provenance of the raw material and the requirement to prove high standards of animal welfare. The discerning consumer now requests that the product they buy can be traced back to the source and they wish to be comfortable that the animal and the environment were not harmed in the process. Reda has been proactive in this area by promoting and sponsoring schemes with the highest standards for both their raw material suppliers, (namely SustainaWOOL boasting 700 accredited farms in Australia) and their own production in Crocemosso.

People working with people

Fabrizio Botto Poala, who works closely with Australian and New Zealand producers, says Reda's offer of handsome premiums to Australian producers is as much about building relationships as growing the business. First there are those that live and work in the picturesque valleys north of Biella, and then there are the producers on the other side of the world.

"We all have to be ready for change," says Fabrizio. "the first to innovate will be at the forefront. We talk about quality with everyone in our company and that includes our growers, and our customers. We need them, and they need us, so we must find the right way to work together."

Welfare measure to meet market sensitivity

To appease this market, the Biella Industry has been calling for producers to adopt environmental sustainability and animal welfare measures. Mulesing is the current concern but buyers like Mario Ferrarone, whose Biella agency was started by his Grandfather more than 100 years ago, says that is just the beginning.

With current premiums covering more than the cost of pain relief or the extra work to carry out crutching, Mr Ferrarone says there is little reason why Australian growers cannot take Europe’s concerns to heart.

“Without declaring wool free from mulesing or pain relief during mulesing we cannot sell to Norway, Sweden, Germany,” he said.

“Even important retailers in Europe and USA are calling for non-mulesed wool.”

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FarmWeekly
Annabelle Cleeland

Annabelle Cleeland

is the national sheep and wool writer for Fairfax Agricultural Media

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My total income is from livestock production in WA as a 1 man operation and I agree completely I
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i was 15 years old when I went up to liveringa station in 1961.with j.drakebrockman . the old