Future of the New Zealand Wool Industry
A Market -led export strategy has been successful for the dairy industry and every other successful exporting company in New Zealand.
So why does the wool industry think it can be successful without a market-led export strategy? Why is the New Zealand wool industry still on about supply-push issues and solutions instead of demand -pull solutions? Why does thirty years of decline in the wool industry translate into continuing the same old thinking? When is the wool industry going to realise its product is just another commodity, unless it is made into something special that people want to buy? and why do the players in the New Zealand wool industry continue to think the competition is each other, when it is actually the world-wide multi-billion dollar synthetics industries?
It is time for some new thinking.
As a trading nation, New Zealand's standard of living is dependent upon wealth generated from its export industries. To be successful exporting nation New Zealand must understand what its comparative advantage is in the world economy. The reality is that New Zealand gains most of its export wealth from tourism and the agricultural economy, and the comparative advantage is two-fold:-
1. producing quality goods and services from New Zealand's natural environment
2. adding value through innovation, powerful branding under "Brand New Zealand" and superb marketing
For New Zealand to move away from being a wool commodity exporter to an exporting nation of high -earning added-value quality natural fibre products, wool needs to be positioned as a luxury natural fibre, sustainably produced from the natural environment and marketed under the "Brand New Zealand" story.
The primary sector needs to realise that to successfully sell its natural fibres to the world ( wool, possum/merino) it needs a strong and resourceful textiles sector that adds value through innovation and design and successfully markets under the "Brand New Zealand "story.
It is the business in the Textiles sector that convert the natural fibre into export products, and it is the business that sell to overseas businesses and earn the foreign exchange. The primary sector needs the manufacturing textiles sector to add value to its natural fibres, and it also needs those manufacturing to be successful exporters.
The strategic vision and future for the wool and textiles industries in New Zealand rely on innovation, branding and marketing to sell to the world natural, authentic, home-grown, environmentally- friendly, sustainable, beautiful quality textiles, clothing , carpets and life-style products sourced from natural fibres and the natural environment.
It is also essential that New Zealand is a power house of R&D for our natural fibres. To deliver product innovation continually increases the value of the natural fibre. As a result New Zealand-made/designed product branded under "Brand New Zealand" to demonstrate to the world the value of using those natural fibres.
As a result 'the strength of the textiles business is critical to the success of the primary sector that produces the natural fibres.
Only then does New Zealand capture maximum Net Economic Benefit (NEB), through increased profits and jobs. NEB is grown through the actions of:
- smart and innovative businesses in the Textiles Sector
- active government intervention that mitigates market failure and whilst adhering to New Zealand's international trade commitments, recognises the beneficial role of the textiles sector to the primary sector and wider economy
The textiles sector can play a major leadership role in assisting the future of the wool industry in New Zealand. Such a strategy must embrace new thinking towards a market-led approach which leads from the front end of the value chain.
A Market-Led Export Strategy
The most successful exporters in the textiles sector are those that are demand driven. They know and continually find new export markets, and then they produce what the market wants.
To meet market demand requires an agile R&D and market-driven philosophy.
Different markets in the world are quite different from each other, so different approaches need to be taken to each market.
The vision should be to double exports within the next five years from the textiles sector , focusing on the natural fibre industry.
The world has an insatiable demand for natural fibres and New Zealand textiles businesses are well placed to embrace the opportunity. Although the sector has been through tough times, it is in fact very resilient, it contains a real depth of skills and knowledge, and there is a determination in the industry to grow.
What Needs to Change
The future of the wool industry lies in the textiles businesses producing natural, authentic, home-grown, environmentally-friendly, sustainable , beautiful quality textiles, clothing , carpets and life-style products sourced from natural fibres and the natural environment and exported under "Brand New Zealand". Wool does not need to be just another commodity.
Government's export strategy needs to support the textiles exporting manufacturers to deliver a market-led export strategy for the wool industry.
Government and industry investment is essential to promote R&D and design as part of a smart natural fibre export-led strategy.
The textiles industry stands ready to work in partnership with the wool industry. Government policy and the wool industry must join with the New Zealand textiles industry to allow it to lead from the front of the wool value- chain to create increased value and growth in demand for wool.
Onlyl then will there be a market-led export strategy for the wool industry, and only then will the farmers receive value-added returns on their beautiful natural fibre.