AGENTS and woolgrowers could save $11 million over five years through the relocation of Sydney’s Yennora wool sales to Goulburn, a new report, Towards a new wool selling future in NSW, has shown.
The pitch for moving the northern region’s wool sales to the southern tablelands has escalated with the release of RDA Southern Inland’s (RDASI) report, which reveals potential yearly savings of up to $2.6 million relocation of wool broker offices and showroom facilities.
RDASI Executive Officer Mareeca Flannery said it was a timely case for relocation with the lease expiring on the Yennora wool selling centre in December.
Last season, 29 per cent of the 1.65m bales sold nationally were through the Yennora centre, at 483,577 bales.
NSW accounts for 38pc of the total national wool production, of that 83pc of wool is delivered to warehouses in NSW, while 17pc is transported interstate mainly to Victoria.
The proposal comes at a time when industry research has identified savings in closing the NSW selling centre and consolidating wool sales to Melbourne.
Decentralisation is definitively a seller issue, according to one of eastern Australia’s largest wool brokers, Australian Wool Network managing director John Colley, who said wool growers and selling brokers would be the principal decision makers in this process.
“There is always a good case to decentralisation and not centralisation because it will be cheaper and reduce cost,” Mr Colley said.
“Though in reality, trying to get 13 or 14 wool brokers to agree what is right and not cut across any Australian Competition and Consumer Commission legislation is like herding cats.
“The reality is it’s a commercial decision among individual brokers.”
The move hangs in the hand of Australian Wool Handlers, who currently hold lease contracts with the four major brokers in NSW, Elders, Landmark, Schute Bell and AWN.
Currently AWH own the largest storage centre in NSW, located in Goulburn, whose two warehouses hold about 40000 bales.
“If it is advantageous cost wise we are supportive of the move to Goulburn and won’t stand in the way,” Mr Colley said.
“We like the idea of moving to Goulburn but we can’t be the tail wagging the dog – we’re one plyer in a whole lot so we will do what is commercially feasible.
“At this stage we have seen a couple of proposals to move to Goulburn and they look attractive but if no one else goes, we won’t go by ourselves.”
New England Wool managing director Andrew Blanch said the December deadline was ambitious with few buyers and exporters consulted about the move.
“We’ve seen so many different proposals put forward over the years so you need to take this with a grain of salt, although this proposal seems to have more legs and support than previous suggestions,” Mr Blanch said.
“Most buyers here at Yennora may find this Goulburn proposal a much easier pill to swallow than a complete move to Melbourne if that is the alternative.
“In the end it is a broker issue and they would hopefully court the exporters to see whether they are willing to make that move because they need us to make it work.
“There will be some heartache with companies moving and or travelling but it is a more palatable idea than completely losing a centre in NSW.”
While the report acknowledged the industry’s willingness to rationalise by closing down the obsolete Newcastle centre in 2013, it stated the decision was years beyond fiscal timing due to emotive issues overruling proper business acumen.