Friday, April 19, 2024

Viewpoint from “Euralie”, Yass – reshoring wool processing and manufacturing

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Paul Simons, ARR.News
Paul Simons, ARR.News
As a teenager, saw the last year of WWII out as a British Merchant Seaman on Arctic Convoys. Settled in Australia in 1949 and joined Woolworths as a Management Trainee in 1954 - retiring as Executive Chairman, Woolworths Ltd from 1987-1995. Since 1982, owner of wool-producing property "Euralie" and a second property "Glencoe" in the last five years. Recipient of an AM, an Honorary Doctorate, Griffith University, and graduate of Advanced Management Program, Harvard University.
Spools of wool
Photo by Vishal Banik on Unsplash

Australia produces 80% of the wool used to manufacture the world’s woollen clothing and 80% of such wool is sent to China for processing and manufacturing.  In recent times, our trading relationship with China has deteriorated and there is now the possibility that China may cease importing Australian wool. 

Witness what has happened in recent times with our wine, rock lobster, barley, copper, timber, cotton, coral trout and coal exports to China.  Our export activity in these sectors has ceased.

Woolgrowers are endeavouring to have the Federal Government provide funding for wool processing to be resumed in Australia (now called “reshoring”, as opposed to off-shoring) and to encourage woollen fabric and clothing to be manufactured here.  In the 1950s/60s when our population was less than 10 million, we had successful clothing and fabric manufacturers in this country. 

Now with our population of 25 million and modern computerised manufacturing equipment powered by renewable energy, our products could be competitively priced. 

It is a puzzle that the Government has not recognised the need to reshore processing and manufacturing.

A small group of woolgrowers in a recent, organised visit to Federal Parliament, Canberra was told that their presentation would have to be supported by a professionally-prepared submission, which would cost between $300,000 and $500,000.  The global companies that could assist us include McKinsey and Bain.  All that expense to point out to the politicians something which is so obviously necessary and as plain as the nose on one’s face.

Perhaps you could help our cause by putting pressure on your local politicians, reminding them that reshoring makes a lot of economic sense.  And as the pandemic has illustrated, every country needs to be more self-sufficient and less dependent on imports.

About 15 or so years ago, the Federal Government and the CSIRO operated a very modern wool processing plant in Geelong, Victoria.  Unfortunately, it was closed and the equipment sold off to overseas wool processors because it was cheaper at the time to have the processing done in China and elsewhere.  The pandemic has changed how we approach this problem and we can no longer be dependent on others for wool processing. 

Reshoring manufacturing of woollen fabrics and clothing should be done here in Australia.  Such manufacturing would require private investment and we know already that overseas companies are willing to join with us to provide the latest manufacturing technology. Indeed they are anxious to do so.


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