Latest Update December 2022
A Little Background
In June 2020, the ABC screened a Landline feature entitled Australian farmers push for local wool processing and manufacturing after coronavirus reveals reliance on China. This move is consistent with growing nationwide discussion about processing and value adding to rural produce in Australia instead of in China.
The Merriwa District Progress Association (MDPA) has been working with the Upper Hunter Shire Council to find ways to attract businesses to Merriwa to increase local prosperity and boost local employment. Although that strategy is underway, the MDPA is independently searching for business development opportunities within the Merriwa district. When this segment appeared on Landline, the MDPA decided that an appropriate location for an Australian-based wool processing plant would be in Merriwa.
Merriwa has long held a reputation for being an important wool-growing district since the early settlers arrived around the 1820’s. Pioneers such as Blaxland and Wentworth joined other notable stud breeders to produce premium quality wool producing flocks in the district. Large shearing sheds were built in the Merriwa district, including Collaroy and Brindley Park, which had 100 stands.
The town still pays tribute to the wool industry with the annual ‘running of the sheep’ at the Festival of the Fleeces.
Merriwa is located on the Golden Highway, linking the sheep-wheat belt with Sydney and Newcastle markets and export facilities. The large amount of freight trucked through Merriwa is expected to significantly increase upon the completion of the Inland Rail Project, which is designed to link Melbourne and Brisbane. Merriwa has a reliable water source, secure electricity supply and a good NBN network. Typically, the local workforce has been raised with a high standard of work ethic.
A wool processing plant would increase opportunities for employment in the district and is likely to attract skilled professionals and their families into town. Once the predicted downturn in coal mines occurs, those locals employed in mines (around Singleton, Muswellbrook and Ulan) will be seeking alternative employment. Apart from increasing employment, a wool processing plant is likely to raise the prosperity of the district. It would provide a handy market for local wool producers, prompting greater production and a return to wool growing for other graziers.
At present there are very few wool scouring plants in Australia and fewer carbonising plants. Facilities in China process approximately 85% of Australia’s greasy wool into a variety of woollen products and garments. It is understood the cost of processing greasy wool in China has increased to an extent that processing in Australia is likely to be relatively more affordable than five to ten years ago. Advice from key operatives in the wool industry indicate that woollen products from a recognised wool growing provenance (such as Merriwa), especially those made in Australia, would be highly sought after.
Focussing on a fine wool product, there is the potential to establish a market for ‘Merriwa Wool’.
To attract investors and business developers, the MDPA (on behalf of the Merriwa district community and wool growers) will require the assistance of appropriate woollen industry professionals, farmers’ unions, Federal, State and Local Government, and other stakeholders. A feasibility study will be required to determine whether a wool processing facility would be profitable under current circumstances, including the scale of operations and opportunities for expansion.
In April 2022 the Upper Hunter Shire Council approved a grant of $6,600 to fund an economic analysis of the cost of cleansing greasy wool at Merriwa. Both James Munro and Stephen Gowlland, MDPA President, attended the meeting and addressed the Council on the merits of approving the motion. The Upper Hunter Shire Council unanimously approved the one-off contribution, indicating a high level of support for this project.
These funds will allow the MDPA to begin investigations into the feasibility of establishing a complete wool processing plant.
Woolconsult International will conduct the study to determine the cost of cleansing wool in Merriwa compared to China. If proven to be competitive, a more comprehensive feasibility study would need to be commissioned to consider the practical logistics of the project.
Merriwa has been a wool producing district for around two hundred years, making it a logical place to site a wool processing and manufacturing plant. A wool processing and manufacturing plant would allow us to add value to a locally grown, natural and renewable fibre.
The MDPA has received encouragement and support from all levels of government and from industry stakeholders.
In July 2022 Jimmy Jackson from Woolconsult International and James Irvine, Managing Director of Tech-NZ, presented the findings of the Economic Analysis Report that looked into the feasibility of running a raw wool scouring plant in the Merriwa district of NSW.
Together, Jimmy and James bring to the table a significant knowledge base that would be difficult to replicate anywhere in the world. Their entire careers are based around the wool industry. This gives them a deep understanding of the history and current international landscape. They are aware of the major players, the latest innovation and the costs associated with wool processing. They are firmly entrenched in the industry and have a detailed understanding the end-to-end workflow that goes into wool processing.
The report – funded by a one-off $6,600 grant released by Council from the Merriwa reserve funds – compared the potential costs in Merriwa to the current operating costs of China (where over 90% of Australian wool is processed). To contain the project and avoid a scope that was too extensive, the report focussed on only the initial scouring process rather than a more unwieldy end-to-end wool processing plant.
In short, an end-to-end processing operation may lack viability but a scouring plant that can deliver clean wool to a range of countries may be viable if a range of barriers – some of which are significant – are overcome. While reconsidering the scope of such a project, the MDPA is looking to continue exploring options while drawing on the extensive international knowledge of Jimmy and James.
Ultimately the presentation of the Economic Analysis Report allowed the MDPA to better understand the report and options for moving forward. Both James Jackson and James Irvine clearly indicated that while the barriers were numerous and significant, there were still pathways for moving forward – particularly if the project was contained to wool scouring.
As an aside, Tayah Clout also brought to our attention a very informative podcast produced by Australian Farmers, which discusses the wool processing plant proposed for Blackall in Queensland. We encourage all members to listen to this podcast. The enthusiasm of the Queensland group is contagious. Click here to listen to episode 30, Make Australia Make Again.
For more information on this exciting project, use our contact form to initiate a conversation or come to our next meeting.