Insights gained from Elders tours to China
Australian wool growers are developing better insights into their Chinese customers and their investment in downstream processing, thanks to an Elders initiative that has been running for a decade.
Elders’ China wool tours have become so popular that the company is hosting two tours in four months this year, attracting more than 90 wool growers and mixed farmers to learn first-hand about developments in the Chinese market.
As China is the largest processor of Australian wool, the tours are enabling Elders customers and staff to develop a better understanding of the later stages of the wool supply chain, with visits to woollen mills, the Nanjing Wool Market and the Nanshan wool processing facilities on the itinerary.
Six Elders staff took part in the latest tour in March this year, as part of the company’s continuing investment in staff training and development.
Andrew Dennis, a wool consultant and former Elders National Wool Manager who organises the tours, says growers returning from China have a totally different perspective about their customers.
“After meeting their customers, listening to their needs and seeing their facilities, those growers come back to Australia with a better understanding and a stronger partnership with their Chinese buyers,” Mr Dennis said.
“For instance, it’s impressive to see greasy wool going in one door and coming out another as a ready to wear suit, all under one roof,” he said.
Mr Dennis described the Nanshan fabric and garment complex in the town of Longkou, Shandong Province, as a highlight of the latest tour
The wool processing facility buys and processes 65,000 bales of Australian merino wool per year, equivalent to 7,000 tonnes clean weight, to produce 2,000 suits a day and other garments for domestic and export markets in Japan, the United States and Europe.
Established only 30 years ago, the facility is part of a family owned conglomerate with substantial interests in woollen textiles, construction, aluminium and tourism.
Nanshan’s Wool Textile General Manager, Pan Feng, expressed confidence in the future of wool based on his 30 years of experience in the industry.
“I have worked with all the textile fibres, but wool stands out because it is a natural product,” he told the growers.
Mr Pan said the company was working on styles and uses to adapt wool to younger, more fashionable markets.
Nanshan had worked closely with the Chinese branch of Australian Wool Innovation (AWI) to try and match wool with more casual fashion trends.
AWI had established a new research centre in Nanshan to research new products and new technologies such as stretching the fibre and reducing micron to produce an end product which was more soft and lustrous.
A passionate advocate for wool, Mr Pan heads the textile centre at Nanshan and is a master of the textile institute there.
“I want the younger generation to realise that wool is a great product, so I hope to work with AWI to establish a specialist wool course here covering all the steps from greasy wool to the finished product.”
While costs make it prohibitive to process wool in Australia, Nanshan continues to invest in world class technology such as state-of-the-art facilities for dyeing, spinning, weaving and garment making.
Yass producer, Tom Gunthorpe, was encouraged to join this latest tour by Craig Pearsall, District Wool Manager from Elders Goulburn.
“The tour was well organised, our guides were helpful and I came home with a clearer perspective about our role as producers and the magnitude of China’s investment and expertise in downstream processing,” said Mr Gunthorpe, who produces cattle, fine wool and fat lambs.
“It was an eye opener to see the scale, throughput and quality control in each of the plants we visited and understand how slim the margins are,” he said.
“It was also valuable to hear the advice of Chinese wool buyers for Australian growers to continue giving them the best quality wool we can grow in that 18.5 micron range.
“Overall, the tour reinforced my understanding of Australia’s strengths in primary production and China’s competitive advantages in processing.”
Mr Gunthorpe added that the rapid urbanisation of China’s rural population and their quest for luxury brands and high quality food and fibre was good news for Australian producers.
More than 300 million Chinese people have moved from rural villages to urban centres in the past 20 years and this trend is expected to continue in the future.
Mr Gunthorpe enjoyed visiting Elders Fine Foods in Shanghai and gaining valuable insights into the Chinese beef and lamb markets from its General Manager, Craig Aldous.
Elders Fine Foods supplies high quality Australian red meat, seafood, dairy products, wine and beer to hotels and restaurants throughout China.
“In the wake of the milk powder scare and other food safety issues, the number one gift request when visiting China is to bring Australian powered milk,” Mr Gunthorpe said.
“On another issue, the Chinese authorities insist that our export red meat is frozen rather than chilled.
“However, there’s no testing of thaw cycles, and the theory is that this is done to protect their local producers, as the Chinese eat fresh meat, not frozen.
“Still, there are huge opportunities to supply growing volumes of red meat to the Chinese, provided Australia continues to adhere to strict biosecurity standards,” he said.