Family affair at Schneider

Family affair at Schneider


Sheep
G.Schneider Group principals Marco (left), Elena and Giovanni Schneider.

G.Schneider Group principals Marco (left), Elena and Giovanni Schneider.

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Founded in Australia in 1922, with financial headquarters in Switzerland and a processing footprint in Italy, China, Mongolia, Iran, Egypt and South America it’s enough to give you jet lag just thinking about it.

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Founded in Australia in 1922, with financial headquarters in Switzerland and a processing footprint in Italy, China, Mongolia, Iran, Egypt and South America it’s enough to give you jet lag just thinking about it.

But for all its locational diversity G.Schneider Group (GSG) remains staunchly family-owned, passionately entrenched in the wool and fibre industry and keen to build long-lasting industry partnerships.

And not surprisingly, given its origin, Australian wool is a big part of the Schneider story.

At the helm of the company, with annual turnover of Euro $250 million, are Giovanni and Elena Schneider assisted by their father Marco Schneider and mother Renata, who have been happy to orchestrate the family business succession plan..

At their core is first stage processing of fibre, from raw product to tops.

GSG's clients are the major spinners and weavers of the world and its specialty is the ability to work with fibre from 10 to 31 microns and in batches of one kilogram to 60 tonnes, making customisation easy.

At the finer end is premium Australian fleece destined for the most important luxury brands in the world, while at the broader end is New Zealand crossbred wool.

Wool accounts for more than 90 per cent of the company's annual throughput by weight and 80pc by value, with cashmere, silk and vicuna, a small camel or llama type animal, the other notable fibres.

GSG's Pettinatura di Verrone, one of only two combing mills still operating in Italy and situated at Biella, is owned in a joint venture with three of the nation's leading manufacturers of superfine product Ermenegildo Zegna, Loro Piana and Marzotto Wool Manufacturing.

Pettinatura di Verrone combs the finest wools and operates the only vicuna dehairing plant in the world, annually processing about 5000kg, notable given total world production is just 7000 to 8000kg.

By comparison the company processes 400t of cashmere and 20 million kilograms of wool annually, with vicuna valued at 1500 Euro/kg, cashmere at 100 Euro/kg and wool at 15 Euro/kg.

"In Patagonia, Argentina, we also manage 10 organic sheep farms running 200,000 sheep which cut more than 800t including 400t of organic wool each year," Giovanni Schneider said.

Marco Schneider said the family’s enterprise had not always centred around combing mills and top-making.

His father Giovanni senior escaped to Australia after the horror of fighting in the First World War and founded the company as a wool broking business in 1922.

“I think he wanted to get as far away from Europe as possible and Australia was a pretty good option,” Mr Schneider said.

“Europe and particularly England was a big user of wool then and 19 to 20 micron was considered fine wool."

Italy developed too and Mr Schneider said business was good until then Italian prime minister Benito Mussolini stopped imports of wool to Italy around the time of World War II, instead insisting on the use of local wool.

Today Italy is the second biggest consumer of Australian Merino wool accounting for about 20pc of production, behind China at about 86pc.

When Marco joined GSG in the 1970s he identified a need to invest in the company's own combing plant.

His father told him he was crazy.

"As a trader you are a free man but once you take on workers and machinery you are stuck," he told me.

"But without it, it was becoming much harder to control quality and to service our clients well," Mr Schneider said.

"Luckily for us Biella established itself as a high quality producer, not a mass producer and we continue to benefit from this.

"But when China entered the market in the 2000s it sent shock waves through the industry," he said.

"Many Italians underestimated the power of China saying they wouldn't be able to match their quality, but I said just remember Japan.

"Similar things were said about it but Japan soon became the world leader in the manufacture of cars, watches and cameras to name a few."

Convinced China posed a great danger but also offered enormous opportunities, GSG established a partnership with a leading local manufacturer and built a mill in China in 2004, specialising in superfine tops, which processes 4.5 to 5.5 million kilograms of, on average, 18 micron wool a year.

Partnerships have long been considered a cornerstone of the GSG business and the Schneider family is always on the lookout for new challenging partners.

"We are keen to do more in China where we believe they can benefit from our special technology to develop fibres well and we can benefit from their sizeable market," Marco Schneider said.

GSG clients are also considered partners and it's one reason the Schneiders haven't gone down the path of producing yarn and cloth.

"We don't want to be competitors to our customers," Mr Schneider said.

In line with consumer expectations, the company has become more eco conscious through adopting water recycling techniques, through its organic wool farm in Argentina and through greater use of by-products from the combing process such as noils, the light and fluffy short fibres which are used to make coats and lanolin (wool grease) from the washing process.

Lanolin was once a considerable earner but the price has more than halved from US$8.60 to US$3.20.

Surprisingly the main demand for lanolin came, not from the cosmetics industry, but from the prawn industry as it is a seriously good weight gaining food source, but a disease in prawns affecting supply has in turn slowed demand.

Looking to the future, the family is intending to continue focusing on quality, sustainability and being in every corner of the world where responsible consumers meet with qualified producers.

Giovanni Schneider said where once wool was a commodity now it was a luxury fibre and the number of consumers of luxury products was growing every year.

"Sportswear is the next big frontier as consumption of suiting is slowly decreasing year by year," he said.

Speaking about the Australian industry the Schneiders encouraged growers to focus on quality, excellence and animal welfare issues saying sophisticated consumers were starting to take more notice.

And while they were happy to see Australian growers experiencing good prices for their wool, they warned rapid increases were not good for industry, potentially encouraging some brands to move to synthetic blends which would curb further price upside in the short term.

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