Family enterprises lead major buyers

A look at the family-owned businesses buying most of Australia's wool

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OUTLOOK: Endeavour Wool Exports managing director Josh Lamb is one of the largest buyers of Australian wool.

OUTLOOK: Endeavour Wool Exports managing director Josh Lamb is one of the largest buyers of Australian wool.

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Australia's largest wool buyers are a group of family-owned enterprises.

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Australia's largest wool buyers are a group of family-owned enterprises, resilient enough to bear the brunt of the COVID-19 pinch and passionate to see their businesses strive - and survive - post-pandemic.

Perhaps one of the biggest changes to the wool buying fraternity in Australia in the last decade has been the rise of tight-knit, family-owned businesses, crippling the stronghold multi-nationals previously held.

Collectively, the three major wool buyers in Australia for 2019/2020 have almost 120 years of wool buying experience, shrugging off larger, foreign-backed companies as consumers demand higher quality wool and better service than years gone by.

Techwool Trading, founded in 1983 by Rod Franklin, remained the largest buyer of Australian wool in 2019/20, buying more than 173,000 bales of wool to the start of June - 75 per cent of which is destined for China.

The company held a 14pc market share in 2019/20, an improvement on 2018/19 when it bought 12pc or about 184,000 bales of wool sold in Australia.

In a strong sign of confidence, Endeavour Wool Exports, formed by former Techwool trading manager Josh Lamb in September 2017, was the second largest buyer of Aussie wool, less than three years after the business was founded.

The company bought 8.6pc of Australian wool this season, equating to 128,000 bales of wool mainly for the Chinese market.

Another family owned-company, Fox & Lillie, rounded out the top three, buying about the same amount of wool as Endeavour in 2019/20.

But how has wool buying changed in Australia in the last decade?

According to Mr Lamb, who founded Endeavour Wool Exports after 16 years with Techwool, international clients are looking for more personalised service and a consistent quality of wool.

"We try and treat every client like they're our only client. We try and over-service them and then try and provide them with a consistent service every time ... no matter what the conditions are," Mr Lamb said.

He founded the company with Stuart Greenshields, who manages the Sydney office, and Warrick Eddington, who is the financial controller.

The company employees nine people and buys wool at Sydney, Fremantle and Melbourne.

Mr Lamb said he serviced about 55 clients, mainly in China, with about half of those the primary focus of the company.

"We wanted to take a different approach to China, a bespoke approach," he said.

"We came into the market when there was a bit of a void in how business was being done and we managed to fill that void and now the focus is to refine what we do.

"We don't want to be the biggest or the smallest and our target isn't quantity, what we want to do is do what we do well and be profitable."

Endeavour spreads its "risk" across three categories including Merino fleece for suiting fabric, semi-worsted wool for active and knitwear and the carding market for carbonised wool.

It buys every type of wool from 14.5 micron through to 36 micron.

"What we try and do is spread a bit of our business across the three main categories but the main growth area as far as wool consumption goes is active wear," he said.

Australian Wool Exchange market information manager Lionel Plunkett said Australia's largest buyers of wool were all underpinned by family-owned firms.

"Your Techwools, Fox & Lillie, PJ Morris and Michells and Modianos have been around for many years and have stuck it through some challenging times," Mr Plunkett said.

"It's the disappearance generally of those bigger corporates like Viterra and Queensland Cotton who between them bought 18pc of the wool a decade ago but have since completely left the market."

For example, in 2009/10, Viterra Wool was Australia's largest buyer of Australian wool, buying 209,000 bales or 11pc of wool sold.

Queensland Cotton, once a dominant force of the wool industry, came in at fourth buying 120,000 bales or 6pc of the market share. Both no longer trade wool.

Another new player, United Wool, formed by Matthew Hand, Nigel Rendell and Andrew Jackson in 2013 sits seventh on the leaderboard of big purchasers, buying 58,000 bales to the start of June.

Two million bales of wool was offered by farmers a decade ago with the forecast for 2019/20 expected to be down to 1.5 million.

A company which has stood the test of time is Techwool, which in 2009/10 was the second largest buyer of Australian wool and has been the largest buyer of wool for the last several years.

About 75pc of wool bought by Techwool Trading each year is sent to China.

Techwool export trade manager Evan Croake said the company had fared well over the years due to its grassroots approach.

"Family-owned companies will remain very strong in the wool industry well into the future," Mr Croake said.

While orders by Chinese consumers are slowly filtering through, trade with India and Italy remains on hold as the countries' borders remain closed.

"There is business around but it is very difficult because a lot of our clients are not operational so we've seen significant pressure from clients because they can't move their end products," Mr Croake said.

"If you look at the wool market in general we've seen significant falls in prices but we're confident the market will stabilise soon ... but we need to see all our export markets working before we see signs of recovery."

The story Family enterprises lead major buyers first appeared on Stock & Land.

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