7. A VISION FOR THE WOOL INDUSTRY: AN INTEGRATED INDUSTRY
The Australian wool industry is at the cross roads; it
must continue down a path of major change or it will contract gradually
into a minor industry, producing a specialist fibre for its novelty value.
The overwhelming imperative is for wool to become more
competitive as a textile fibre - both in terms of its relative price and
for its value as a textile raw material. Pursuit of that outcome will
involve overcoming the present deficiencies in wool's competitiveness, as
well as combating the new gains that will inevitably be made by wool's
competitors over the years ahead.
One of the major problems for the wool industry is that
it is very fragmented. The raw wool production, distribution and
processing sectors should have a considerable commitment to securing the
long-term commercial viability of the Australian wool industry. Their own
survival depends on it and yet genuine integration remains elusive.
In contrast, the wool industry's customers are not
dependent on wool. The worsted and woollen spinning sectors have an
interest in continuing supplies of wool, but they are able to adjust
progressively to alternative fibre supplies. The further downstream that
analysis is conducted, the less the commitment to the use of wool.
Fragmentation in the wool industry has two dimensions;
many small firms within each sector and lack of vertical integration
between sectors.
- Within sectors there are:
- 10,000 relatively large growers (another 30,000 or more are minor
producers)
- over 40 wool selling brokers
- 30 private treaty operators
- more than 50 exporters
- 23 early stage processors
- Between sectors - there is very little vertical integration from
production through to processing, although some individual companies
operate across more than one sector.
That fragmentation is a major source of inefficiencies in
the industry, but it is also an important reason for the lack of
cooperation in undertaking industry initiatives. In the absence of a
collaborative approach to addressing industry issues, the Wool CRC is
ideally positioned to:
- bring industry sectors together and
- link industry to research groups in pursuit of a common research and
development goal.
Experience with Wool CRC1 has shown that the gains from a
cooperative approach to wool research and development exceed the gains
from several independent research units. If granted a second Wool CRC, the
aim would be to establish a seamless relationship from raw wool production
and distribution through to wool processing and spinning.
Lionel Ward
Director, Wool CRC
6.3.98
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