Wool Processing Plant

Latest Update MARCH 2024

A Leap Forward in 2023 and 2024

During 2023 the MDPA connected with The Stable, a highly experienced consulting company operating out of Dubbo and Sydney. Through the work done by the team at The Stable, the wool processing concept matured significantly into what we are calling a wool and transport precinct. This precinct could include not only a wool processing plant (as per our original concept) but also a wool storage facility and a heavy vehicle servicing hub.
Given the broadening of the project scope, it is important to revisit the feasibility and community acceptance of the project. For this reason the MDPA held an information session so the people in the district can understand the change in the scope of the project and to have their say on whether the larger concept is something we want to pursue as a community.
The information session received positive support to seek funding and further investigate the feasibility of the project. 

To December 2022

The MDPA has made three significant breakthroughs in its endeavours to assess the viability of a wool processing plant in the Merriwa district. A feasibility study, discussions with another wool processing start-up business in Queensland and assistance from a local business identity have proven fruitful.
The feasibility study was conducted by Woolconsult International in conjunction with James Irvine, Managing Director of Tech-NZ. A the Economic Analysis Report was provided to the MDPA in mid-2022. The feasibility study – 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, the Economic Analysis Report suggested an end-to-end processing operation may lack viability but a scouring plant (the initial stage of the wool processing) that can deliver clean wool to a number of interested countries may be viable if a range of barriers – some of which are significant – are overcome.
In reconsidering the scope of such a project, the MDPA also contacted a company in Queensland that is attempting to set up their own processing plant. The connection was made after Counsellor, Tayah Clout, suggested we listen to an Australian Farmers podcast regarding the Queensland wool plant. The company, known as QWool, recently wrote to the MDPA with an update regarding their situation. In the correspondence, John Abbott, QWool Chairman, indicated they were moving ahead with the plant. This is a major incentive for us to steer the course on the wool processing plant as it proves that with the right resourcing this is possible. 
In addition to this, a local businessman with significant experience in corporate undertakings, has suggested that to seriously consider moving forward, the need for feasibility funding is critical. He also pointed to a group out of Dubbo that has been engaging with the NSW Government and the Port of Newcastle Authority to provide development ideas for the port (it is assumed wool from a local processing plant would ship out of Newcastle). Furthermore, it appears that wool transported from QLD is now sent via NSW. Aside from Yennora (Sydney) there are three main wool store sites – Goulburn, Dubbo, and Tamworth with Yennorafading in significance due to the difficulty of dealing with transport in Sydney (overcrowding) and the substantial number of movements in and out of Port Botany being an issue. In addition to this the Golden Highway is now part of the major traffic route for the NSW Government. These factors combine to suggest Merriwa is well placed to consider implementing a wool processing plant.
The MDPA continues to pursue this idea. If it continues to move forward it will be through the work of the MDPA and a number of committed local community members. If it does not go ahead, it will certainly not be for want of trying.held

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.

The funds will be provided out of the ‘Merriwa Reserved Funds’ (proceeds of Council selling houses previously owned by the Merriwa Shire Council).

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.