Thursday, December 7, 2023

Changing wool direction won’t be cheap, easy

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Selling bales of wool to the rest of the planet is not going to improve farm gate returns when the problem in the same supply chain is the lack of New Zealand’s ability to manufacture finished product.
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Tech‘N’Colour NZ general manager Richard Bloemendal says what will make a difference is the protection of New Zealand’s textile and leather industry and investment in its manufacturing infrastructure.

Bloemendal says despite a group being established to fix the wool industry, one organisation cannot take charge of an almost zero manufacturing infrastructure industry relative to raw materials available and hope to turn it around with words of leadership.

“Under current infrastructure, all we can do is sell more raw materials offshore for others to make the money,” he said.

“I think most, if not all, are missing the manufacturing and infrastructure discussion.

“We grow wool and produce ship loads of leather, NZ consumers need to be able to buy quality NZ-manufactured textile and leather products in NZ, and NZ needs to be exporting finished products across the world, not raw materials.

“The margins are in the finished product and not in selling bales of wool or leather.

“We should be in a position where we have the cookie to sell, not sending raw material away for others to reap the rewards.”

To do that, the manufacturing industry needs protection.

“We have gone through decades where governments have said they will remove tariffs off textile imports,” he said.

“NZ is too small to compete with no tariff protection for textile and leather.

“We are getting our leather back in the seats in the cars we buy here, it needs to change.

“NZ consumers are being dragged along to believe the only option is imported product – totally wrong.”

Wool and leather may be deemed a commodity to NZ, but around the world they contribute to significant luxury items.

“Rightly or wrongly, the consumers within our largest trade partner, Asia, are not concerned with sustainability, farming emissions or climate change,” he said.

“Is it right for NZ to sell into that market?”

The leather and hide industry is having the same problems as the wool industry.

“And they are both co-products of NZ’s primary beef and dairy sectors.”

Bloemendal says in his many years in the industry he has witnessed the demise of NZ’s value-added textile manufacturing and leather sector to almost zero wool apparel manufactured in NZ, other than in a handful of boutique businesses.

“The focus for historical reasons seems to be the lifting of the raw material value of wool over the farm gate,” he said.

A converse perspective, Bloemendal says would be turning that wool into volume, value-added consumer products commanding the consumer dollar where in most, if not all, cases the margins are greater.

Richard Blomendal | September 28, 2020 from GlobalHQ on Vimeo.

“The key to changing the sector is manufacturing infrastructure,” he said.

“This requires investment in existing textile manufacturing plants and investment in start-ups, which is where the industry’s problems lie.”

The other problem is a serious lack of technical expertise and modern technologies to convert wool and leather into end-user products.

“The major hurdle the NZ textile and leather industries have is people and organisations willing to invest in sustainable textile and leather finished product manufacturing, while the Government allows tariff-free importation of synthetic textiles and leather imitations under the ideology of free trade,” he said.

“One can’t preach climate change, be signed up to such global accords and be on the side of NZ enterprise whilst wearing an imported polyester tie, putting synthetic carpet down in homes and offices and cycling in lycra.”     

Reinventing NZ’s wool direction won’t be cheap and won’t be easy.

“Until NZ reinvests in wool conversion infrastructure, it has an extremely long bow to draw that NZ will sell scoured, baled wool across the farm gate for more significant value than it is today,” he said.

“All these blokes can say what they like, but the bottom line is the margins are in the finished product, not in selling bales of wool, that’s what is broken and needs to be fixed.”

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