AWN establishes new markets for WA wool

AWN establishes new markets for WA wool


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John Colley and Peter Howie inspecting wool on the Dyson Jones show floor last week.

John Colley and Peter Howie inspecting wool on the Dyson Jones show floor last week.

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MOVES into garment manufacture by vertically-integrated broker Australian Wool Network (AWN) will open up new markets for WA woolgrowers before the end of this season.

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MOVES into garment manufacture by vertically-integrated broker Australian Wool Network (AWN) will open up new markets for WA woolgrowers before the end of this season.

And within two years, AWN's prestige brands will have their own retail outlet in Perth, supplementing other capital city outlets, 282 wholesale outlets, on-line sales and exports.

Growing the wool industry by expanding local production of Merino wool and wool-blend garments was the aim, according to AWN managing director John Colley last week on a visit to the network's WA arm, Dyson Jones Wool Marketing Services in Bibra Lake.

With two Victorian garment manufacturers purchased and their operations integrated at a new purpose-built factory on Melbourne's outskirts, Mr Colley admitted AWN was looking for more takeover targets.

"What I'm trying to do is build a stable of well-known, Australian-manufactured knitwear," he said.

"Anyone can just sell wool, but as a broker what we are trying to do is add value to our woolgrowers' product.

"We are taking any money that we make (as Australia's third largest wool broker) and reinvesting it back into an Australian-made product, in an Australian manufacturing plant, with our own designs, not only to supply the domestic market but for export.

"I think it's long overdue for people to invest back into Australian wool."

Mr Colley said for years woolgrowers wondered where their wool was going and if there was a market for it.

"Woolgrowers can grow wool for something that they know there will actually be a market for (and) it is giving us access to a new market, we can convince growers that we are investing money in the pointy end of the wool industry and that's a reason to support us," he said.

In November 2014 AWN purchased Hysport which was established in 1971 and produced jumpers and other knitwear for Australia's America's Cup team and the 1980s and 1990s Winter Olympics teams.

It produces a range of pure wool and wool-blend quality women's and men's fashion knitwear and accessories such as gloves, beanies, scarves and wraps, marketed as the MerinoSnug brand.

It also produces a range of blankets and cushion-cover homewares with the Woolmark logo and sold under the Only Merino brand.

In January AWN commissioned a new manufacturing plant with state-of-the-art, whole-of-garment knitting machines at Carrum Downs and on July 1 it completed the purchase of Geelong West specialist knitwear manufacturer Hedrena and moved it to the new factory with Hysport.

Hedrena produces women's fashion wear and next-to-skin garments, carrying the Woolmark logo.

"Hedrena were actually (wool) next-to-skin pioneers, they were in production before Icebreaker," Mr Colley said.

While the MerinoSnug brand was sold only through an extensive wholesale network, Hedrena had retail outlets in up-market locations of Collins Street, Melbourne and Glenferrie Road, Malvern, as well as Geelong, in the CBD and St Ives, Sydney, and in Adelaide.

Mr Colley said the marketing was being blended with Hedrena retail outlets stocking MerinoSnug products and MerinoSnug's wholesale outlets "exposed to" Hedrena garments.

Wool specification for Hedrena was 15.5, 17.5, and 18.5 micron non-mulesed fine wool of 85-95 millimetre staple length that was spun into a worsted yarn.

"The use of non-mulesed wool is a legacy issue that we've inherited, but we intend to maintain it," Mr Colley said.

"We see non-mulesing as an evolution of the wool industry.

"I understand how difficult it is - I farm myself and I'm not advocating that everybody should go that way, but for us marketing the Hedrena product at retail level, we believed it will have to be a non-mulesed product."

He said Hysport used a wider range of wools - 17.5, 19.5 and 22.5 micron plus a "very small quantity" of 24.5.

"MerinoSnug type wools are all short wools, we like them at 60 (millimetres staple length) but we will take them up to 65.

"Shorter wools tend to be sounder in strength and the sheep tend to grow more wool - on our own farm (at Canowindra in the New South Wales central west) we shear three times in two years.

"There is a lot of wool here (WA) that is suitable for us and we'll be looking to put something together for that, certainly before the end of June next year.

"We've got two projects we'll go live with before the end of the season where we'll actually take wool from WA and we will develop a swing tag around those two areas, with full traceability of the product for that."

AWN's Direct Network Advantage (DNA) supply project provides full-traceability and links a garment to the growers who provided the wool through a quick response (QR) code on the garment tag.

By scanning the QR code with a smart phone, a customer can watch a short video clip about the woolgrowers.

"The DNA project is thousands of bales of wool, we'll actually need quite a lot of wool out of WA," Mr Colley said.

"We are focusing on the finer end there, probably aiming for the 18.5-19.5 (microns), but WA lends itself to use up to 22 micron, especially in a season like we've had now after a bit of rain.

"We're actually going to make a bit of a special out of the 22 micron from WA."

Perth is destined to get a retail outlet.

"(We are) opening another store in Sydney - a flagship store - on November 1 and we're looking to open stores in Canberra, Brisbane and Perth over the next two years," Mr Colley said.

"The tourist market is very strong for our brands and Perth is a big tourist destination and we think it's only going to improve because of its access to Asia.

"It lends itself to us doing the research to establish where is the best location (in Perth) to have a store."

Mr Colley said AWN was the only vertically-integrated broker in Australia.

"We control the path lines, we supply the raw wool to the top maker who then supplies our chosen spinners - we've got three or four spinners in Italy, one in New Zealand and one in China - then the yarn comes back to us at Carrum Downs where we knit the product.

"With MerinoSnug it's completely made there.

"With Hedrena, we export the fabric and the cut, measure and trim will now be done overseas and then we import the final product back to Carrum Downs."

Mr Colley said AWN was still negotiating five options for where the cut, measure and trim will be done.

AWN planned to boost exports of MerinoSnug and Hedrena garments.

"It will be exporting in a much larger capacity - predominantly to Europe and Asia - by the end of this year," he said.

"Over the past 30 years we've (Australia) failed miserably with the marketing of wool.

"It hasn't kept pace with the rest of the textile market and that's for a variety of reasons.

"Now we are back into a pure supply-and-demand situation, the price for uniform market 21 micron is quite strong, and it's likely to remain that way.

"We've still got an oversupply of superfine wool which has got depressed prices.

"We're focused on doing what we've got and doing it very, very well.

"AWN is not trying to save the wool industry, but we're certainly trying to expand it."

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