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Wool Stocktake : AWI Annual Report 2015-16
CHAIRMAN’S REPORT The role of the Board of Australian Wool Innovation (AWI) is to set the strategic direction for the wool industry’s research, development and marketing company – a direction that aims to increase the profitability of Australian woolgrowers. This direction is guided by the result at WoolPoll plus ongoing consultation between AWI, woolgrowers and industry stakeholders. It was heartening to see at WoolPoll 2015 an increased level of support for the 2% levy rate. The Board is very conscious that AWI handles a significant investment from woolgrowers which is in part matched by our biggest stakeholder, the Federal Government. All our major research, development and marketing investments are measured, by an independent third party, for the benefit they deliver to woolgrowers. The past three-year strategic period, which ended on 30 June 2016, has been one of substantial progress at AWI against a backdrop of global market uncertainty. In some key markets, such as Europe, there is still ongoing economic uncertainty. However the underlying demand for wool has improved in other markets, such as the US and Japan, with more consumers in touch with the benefits of the great natural fibre we produce. The company’s marketing is successfully positioning wool as a premium fibre for luxury apparel and sportswear, with many natural qualities that synthetic fibres don’t possess – natural qualities for which consumers are willing to pay a premium price. The market for premium clothing is projected to continue to grow, not only in the three dominant regions of North America, Western Europe and ‘Affluent Asia’ (eg Japan, South Korea), but increasingly in China which offers significant growth potential. Australia produces about 90% of the world’s fine apparel wool (<19.5 micron), and so we are well placed to take advantage of growth in these markets. The company works with key global partners in these markets, helping them target their consumers, create and promote key marketing tools that focus on the benefits of wool, and educate and motivate consumers to purchase wool products. AWI’s subsidiary The Woolmark Company is a well-respected and sought- after co-marketing partner with brands and retailers. We are conscious of the need to continually build the demand for Australian wool. Ultimately, our work in marketing aims to increase the demand for wool and thereby lift the Eastern Market Indicator (EMI). During 2015/16 the average EMI rose to 1254c, which is more than 150c higher than the previous year’s average. Furthermore, the EMI was relatively stable during the year with the average monthly EMI higher than 1200c for all 12 months of year. In the on-farm R&D area, AWI has continued to invest in the areas that woolgrowers have told us they want us to invest: combatting wild dogs, flystrike protection, shearer and woolhandler training, genetics and woolgrower networks. On-farm gains are also being achieved through popular extension programs such as Lifetime Ewe Management. To date more than 2,400 sheep producers across Australia, representing about a quarter of the national ewe flock have participated in this program. Participants have typically recorded a lift in weaning rates of 7-8 per cent and a significant reduction in ewe mortality. Healthy demand for our fibre and higher on-farm productivity – and better seasonal conditions lately – are returning confidence to the Australian wool industry. It might take some time for woolgrowers to rebuild their flocks, but it is necessary so that Australian woolgrowers can take advantage of the higher largely demand-driven wool prices. Merinos have long been the foundation of the national flock, and they are now as important to the sheep industry as ever. Also of note during the year, the independent Wool Selling Systems Review panel submitted to the AWI Board its final report. This review explored opportunities to reduce the cost of selling wool for woolgrowers, reduce the barriers for those wanting to buy wool and help bring the wool industry into the digital age. The panel’s final report included a number of substantial findings and recommendations including the creation of an online Wool Exchange Portal (WEP). AWI subsequently engaged a working group to assess the viability of a WEP with a decision as to whether to push forward with the WEP to be made by the time of this year’s AWI AGM. AWI’s new three-year Strategic Plan, covering the period to 30 June 2019, contains five portfolios across which we plan to execute 13 strategies and 23 programs. These strategies seek to address key industry issues and opportunities. It continues our broad directional strategy that was established by WoolPoll 2015. You have my commitment that this company – your company – will continue to operate for the benefit of its shareholders, Australian woolgrowers, and help build the profitability, competitiveness and sustainability of the Australian wool industry Wal Merriman Chairman, Australian Wool Innovation 19 August 2016 8 UP FRONT
AWI Annual Report 2014-15
AWI Annual Report 2016-17