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Australian wool's prospects stacking up with federal boost

Wool processing in South Australia could expand at Michell Wool's Salisbury plant amid a federal announcement that grants may become available to reduce reliance on Chinese processing.

As reported by Flow last week, Federal agriculture minister David Littleproud recently declared that WoolProducers Australia would be awarded a $662,000 grant ‘to explore new markets and processing options for Australian wool’.

Listen to the full interview including a market update from Steven Read from Michell Wool on the FlowNews24 podcast:

In making the WoolProducers announcement, Littleproud stressed the importance of the cash injection for the industry in that it would help the industry to explore new markets.

“Currently, the bulk of Australia’s wool clip is exported to and processed in a small number of markets.”
“If there’s one thing the global pandemic has taught us, it’s that market diversification is important for healthy industries.”

Read echoed Littleproud's optimism on Flow on Friday morning as he highlighted the nature of the opportunities that the future may hold for the industry in Australia.

"It's fantastic for the Minister, Littleproud, to step up and say 'let's do some feasibility work in terms of both re-establishing on-shore processing in Australia but also working with our customers outside of China to expand their early-stage processing' and a lot of that expansion could well be with Chinese interests."

Read stressed that water would be a fundamental asset when it comes to scouting potential locations for new facilities for the wool industry.

"You've got to consider the location for logistics...water in, water out, all sorts of things have to be considered, there's all sorts of people who've put their hand up and the more people interested, the better."
"From a Michell point of view, we've got a big facility here at Salisbury, we think we can scale up very quickly and the Michell family is 100% behind this so it's quite exciting times."

Read went on to emphasise how he believes the industry in Australia should place a high level of importance on utilising modern technologies if there is serious appetite for growth.

"But the big trick I guess is a lot of what's going on in terms of processing in China is using 25-30 year old technology...they were picked up out of Australia those plants, out of Europe, out of the Americas, out of the far east, Japan, Korea, Taiwan - so if we're going to do an expansion we might want to get our heads around a bit of innovation and talk about doing it with modern processing technologies."

Michell Wool, located in Salisbury in Adelaide's north, officially endorsed David Littleproud's announcement last week when the company issued a press release, their statement declaring among other things:

"As Australia’s oldest and largest wool processor, Michell Wool welcomes the Federal Government’s announcement of a feasibility study to explore new markets and processing options for the Australian wool industry."
"We believe it makes sound business sense to actively explore options for value-adding, including the development of early-stage wool processing capacity, both here in Australia and in other parts of the world, with the intent of increasing competition and ultimately delivering higher returns for growers."


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