Iconic Australian Wool Processor to Close Plant in Melbourne

Iconic Australian Wool Processor to Close Plant in Melbourne

After 34 years as an early-stage wool processor in Australia, Victoria Wool Processors has announced that it will close its plant in Melbourne, but continue to trade Australian Wool. The company was originally established to trade wool in 1993 but built volumes to justify opening its own start early-stage wool processing in 1990, with further expansion in 1994, 1996, 2000 and 2005. Unlike most other plants (often foreign owned) that were established around the time it did not receive any government funding and relied on private capital and endeavor.

Unfortunately, 21 employees were made redundant by this decision which was not an easy one to make for its Owner and the Management team who sighted overcapacity within the early-stage wool processing sector as the major cause. This has been caused by the continued decline and projected further declines in the size of the Australian wool clip and with fully justified biosecurity measures preventing the importation of any substitute greasy wool. Early-stage wool processing requires specialized equipment that is unsuitable for other fibers that further restricts an alternative use of the equipment

Management noted that the revenue per kilogram of wool processed including revenue from the sale of wool grease was below the 2000 price up to 2016 when due to increased gas price there was no alternative but to increase prices that had the corresponding affect of reducing volumes. That at its peak in 2015 there were 45 employees working at the site and processing 20,000 tonnes of greasy wool.

With this closure there are only 2 early-stage wool processing plants remaining in Australia processing less than 5% of Australian grown wool and VWP management hopes that the two can continue to operate and support the industry. Source: VWP