Package to attract more investment in value-adding wool processing facilities

30/3/95

The State Government today launched a multi-million dollar incentive package to attract more investment in value-adding wool processing facilities in Western Australia.

The package encourages wool scouring companies to relocate to more environmentally acceptable sites and provides financial incentive to establish topmaking mills (combing the wool into tops after it has been scoured or washed).

It has been developed by Commerce and Trade Minister Hendy Cowan and Primary Industry Minister Monty House, the Minister's Wool Strategy Group and the Department of Commerce and Trade.

Mr House said a number of international wool companies were on the verge of making a decision to establish top-making facilities on the outskirts of Perth or at regional centres.

The package offers the three aqueous wool scouring firms an opportunity to relocate as a joint venture company to a special 40 hectare industrial precinct in East Rockingham (IP-14) or a regional location.

"It highlights the State Government priority of value-adding the Western Australian wool clip, our commitment to regional development and responsible environmental management," the Ministers said.

"If fully adopted, this package could create several hundred jobs in regional areas or Perth, potentially boost the value of wool exports by over $200 million a year, and help resolve environmental problems facing the wool scouring industry."

The State Government incentive package offers companies several options:

·       up to $11 million in Government assistance for relocation of the three aqueous wool scours to a regional location;

·       up to 15 per cent of the capital cost of establishing a wool scouring or topmaking project in a regional location;

·       up to $11 million in assistance for land and a centralised waste treatment plant to help relocate the three aqueous wool scours to IP-14.  An additional 10 per cent of the capital cost is offered to establish a topmaking facility within IP-14; and -

·       up to 10 per cent of the capital cost to build a topmaking mill adjoining the AWP Holdings solvent scour at Bibra Lake.

The Jandakot Wool Scouring Pty Ltd, Swan Wool Scouring (WA) and Hulme Wool Scouring Co Pty Ltd are currently evaluating a feasibility study based on establishing a 40,000 tonne a year, state-of-the-art, aqueous wool scouring facility at IP-14.

The companies estimate it would cost about $45 million to relocate and another $35 million to establish a topmaking mill.

"The State Government package offers the three aqueous wool scours an innovative solution to invest in more efficient equipment, overcome increasing urban pressure and ensure environmentally sustainable effluent disposal methods," Mr House said.

"If the companies relocate and restructure their industry, it would double WA's scoured wool output and pave the way for a topmaking plant instead of exporting much of our raw wool to be processed overseas."

A combined scouring and topmaking facility would employ about 150 people during construction and up to 250 when fully operational.

The Ministers have been strongly promoting WA's wool processing potential to companies in Europe, Asia, China and India during recent visits.

Mr House also released a report compiled by his Wool Strategy Group titled 'Opportunities for Early Stage Wool Processing'.

The report highlights that WA produced 200 million kilograms of greasy wool a year, worth more than $600 million.

However, unlike the Eastern States, little value was added to the raw product by early stage processing prior to export.

"There is a window of opportunity available to WA and urgent action is required to take advantage of our high quality raw wool product, land, technology and proximity to growth markets in Asia, India and China," Mr House said.

"The report found that WA has the potential to be exporting 20 per cent of the State's wool production as high-value wool tops and about 40 per cent as scoured wool within 10 years.

"With the addition of extra companies bidding at WA wool auctions, prices could increase by as much as five cents per kilogram and significantly benefit woolgrowers and the industry."

Mr House said aside from job creation, there would be major benefits from having a topmaking mill in WA including more market options for growers and industry, new value-adding potential and the opportunity to differentiate WA wool at the processed stage.

Media contact:  Will Henwood 481 2044 or 041 9901500