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AWI gets on with business

03 Dec, 2009 12:12 PM
AFTER one of the most unconfrontational Australian Wool Innovation annual general meetings in recent times, the question now is whether Australia's peak wool power can deliver what it has been given the benefit of the doubt on.

At last week's AGM in Sydney, the move to double AWI director terms to six years passed with barely a hint of resistance, winning support from more than 86 percent of voters or 162,475 levy payers.

Incumbent directors Chick Olsson, Roger Fletcher and chairman Wal Merriman were all voted back in after running unopposed for the three board vacancies.

Mr Fletcher won the strongest show of support picking up 78pc of the pro votes.

WoolProducers president Don Hamblin, who was vocal in his opposition to extend directors terms, reluctantly admitted that the "growers had spoken" and it was time to move forward.

But some commentators worry that in amongst the "to-ing and fro-ing" on issues such as the mulesing debate, that the ball has been dropped on the key problem of the downturn in the nation's flock.

As part of uncharacteristically smooth question time, wool levy payers told AWI it must instil confidence back into the industry, boost wool prices, and keep up its end of the bargain of selling more wool.

AWI relayed it was running its second strategic focus group workshop on December 18, which would include its "young Merino hero" group - an initiative it touted as being part of the solution to communicating back to its growers.

"I wouldn't say extension officers have failed but at the same time there is evidence that there's only uptake of information by about 20 per cent of growers," Mr Merriman said.

"With these young growers we want them to act like mentors as I think when you see what is happening over the fence it is a different message than what is coming from a Department of Primary Industries officer."

Australian Wool Growers Association chairman Martin Oppenheimner said such moves would help unify the industry.

But he said pushing the profitability of running a self-replacing Merino flock had to become a priority.

"The industry as a whole has got to get out there and be proactive and make some positive changes to curb what seems to be a growing perception that there is no profit in the wool industry at all, which as far as I know in my own business is blatantly wrong.

"The bulk of (AWI's) effort is on other end of the pipeline, which is necessary, but they must not forget that there are many growers switching out of wool ... and there has to be more done to show what opportunities there are in wool businesses."

This year NSW Department Primary Industry analysis reports a self replacing Merino ewe (21 micron) mated for prime lamb operation returns a gross margin per hectare $309.57; Merinos ewes (19 micron) mated for Merino lambs at $283 GM/ha; Merino wethers (19 microns) $233 GM/ha; and cattle yearling production at $170.60.

"I do not understand people changing from self replacing merino flocks to breeding beef weaners at one third the gross margin per hectare," Mr Oppenheimer said.

The figures are based on NSW south central operations.

AWI chief executive Brenda McGahan and Mr Merriman vowed to take the necessary steps - further expenditure cuts, partnering with key accounts and not sacrificing any of its marketing budgets - to get more wool in stores despite the international retail industry still cowering from the global financial meltdown.

Reducing research and development projects from around 300 to 80, allowed an extra 50pc of funds to be directed back into marketing efforts.

The AWI directors embraced a renewed effort to lift wool's appeal by pushing its carbon neutral benefits and promised they would continue to work collaboratively with its global peers through the newly formed carbon wool alliance group.

"Carbon has been identified as strategic priority by the board," Mr Merriman said.

"AWI will be funding wool specific research for the wool life-cycle from the time a lamb is born to the time a garment is washed to show wool is part of the solution in climate debate. We intend to show government wool should be treated like a forest."

To fund the scientific research to support AWI's carbon message, Mr Merriman admitted "some on-farm projects" would be cut and curtailed to fund the carbon program.

Much of the dialogue from attendees at the meeting, focused on a new sentiment of "unity" and the critical need to give AWI its space to focus on selling wool and not the agri-politics of it.

This came a week after International Wool Textile Organisation president Günther Beier pushed the need for uniformity was critical in his keynote address at the IWTO Round Table in New Delhi.

"An international 'One Voice' approach of the entire wool industry is essential for our marketing and lobbying activities within the global textile industry," Mr Beier said.

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AWI chief executive Brenda McGahan.
AWI chief executive Brenda McGahan.

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