THE Michell family's history has been proudly woven in wool processing for five generations.
The broker and processor has withstood the Spanish flu, world wars, a massive grower stockpile in the 1990s and now a shrinking wool clip to celebrate 150 years in business.
Company founder George Henry Michell began washing greasy wool he had bought off local farmers in the River Wakefield at Undalya, south of Clare, in 1870.
This wool was then exported to England.
His four sons carried on the GH Michell & Sons business from Hindmarsh in Adelaide, washing wool in the River Torrens, near where the West End Brewery sits today.
Successive generations have been involved in nearly every stage of processing, including spinning and knitting, but today's custodians David and Peter Michell are focused on scouring and carbonising wool for clients across the globe.
The brothers bought out 38 family members in 2004 to continue the tradition.
Their main mill at Salisbury in Adelaide processes eight million kilograms to 10mkg a year - about a quarter of the carding market - while another mill in Suzhou, China, has carbonising capacity for about 6mkg and some specialty top orders.
David says each generation of the family has had a progressive outlook, including his grandfather who travelled to China in 1948, prior to the Chinese revolution, seeking opportunities.
He believes the Michell family's enduring success and being one of just three remaining Australian processors comes down to an unwavering belief in "nature's high-tech fibre" and an ability to manage risk.
They have also worked relentlessly to process wool "smarter and cheaper".
Since the mill moved to Salisbury in 1972, they have more than doubled carbonising capacity and worked hard on labour and energy efficiencies and waste water and chemical management.
"You don't always see the technology in what we have - you look at the technology and say 'Wow, that's old' and some of it is, but we have put a lot of effort into how can we get more wool to go through the same machine," David said.
"It has been discussed as being like grandfather's axe - it has had 16 different heads and 15 handles, but it still belongs to your grandfather."
David also credits a major part of their success to their staff - more than 90 employees in Australia and a similar number in China - many with decades of experience trading wool or blending batches.
"Doing it right from the start makes a big difference at retail," he said.
"In generations past, it has been family members at the core of the business, but this time Steven (Read) is driving the business, along with his chief financial officer Mario Monda, like it is their own - that is the culture we have tried to establish."
Mr Read, who is the company's chief executive, says one of the major challenges they have had to overcome has been the changing make-up of Australia's wool clip, with finer Merino wools and coarser composite wool.
"We can process superfine wool now just as simply as we used to process 23 micron or 24M wool," he said.
They have built strong relationships with clients from more than 20 countries, which Mr Read says has been an advantage as they are not as exposed to China as some of their competitors.
"It is part of the risk management strategy. If something did go wrong in one area, we have other customers to keep the factory busy and wool moving," he said.
But Michell Wool has ventured into Chinese processing, investing $20 million in a carbonising line and KROY Loose wool Superwash in Suzhou in 2006.
Surprisingly, David says it was not price that drove the China venture, with wool cheaper to process in Australia than China.
Instead, it was the opportunity to process wool from eastern Europe, the United Kingdom, South Africa and South America for Chinese customers.
No wool can be imported into Australia due to quarantine concerns.
"It has given us a bigger suite of products for our customers," he said.
"Our competitors were using other wools and saying that they were as good as Australian, but they were quite different."
David says they are firmly committed to Australian processing and are staunchly South Australian.
"Our markets are the world, they are a telephone call away or a flight out of Adelaide to Singapore or Dubai - you don't need to be in Sydney or Melbourne to make it work," he said.
He says they will continue to invest in the Salisbury mill to reduce its environmental footprint and become more energy efficient.
Their immediate priority in these COVID-19 times is getting customers using wool regularly again, but are also keen to install optical recognition technology.
Wool is a bit of a disease, once you have got it you can't let it go - we are here to stay.
"Our customers get upset when we leave 0.151 per cent of burr or seed in a 10-tonne order. If we can get that to zero or even get rid of skin, for example, the world is our oyster because that has been a problem forever," he said.
David sees a great future for the company with a "next generation" strategy, including his three daughters and Peter's two children.
"There are no guarantees of course, but all our energy is focused on doing things bigger and better and that is also on the minds of the sixth generation who are looking in," he said.
"I still love the business. We have some great staff, we have some great customers and some really good suppliers of wool like us that are wedded to it.
"Wool is a bit of a disease, once you have got it you can't let it go - we are here to stay."
Opportunities grow for farm-to-mill orders
Wool's share of the world textile market has dropped considerably in the 150 years the Michell family has been in business, with it now a niche product.
But Michell Wool chief executive officer Steven Read still sees a bright future for wool, with its great performance and ability to be worn next to skin.
Michell buys wool through several avenues - the auction system, through dealers in towns across southern Australia and for several decades, it has been building relationships with growers through farm-to-mill orders.
If someone wants to buy a top end, expensive garment, they want to know much more than the brand on the label - that is exciting.
Mr Read expects the mill orders to grow as end consumers increasingly want to know more about what they are wearing, including animal welfare and on-farm sustainability.
"If someone wants to buy a top end, expensive garment, they want to know much more than the brand on the label - that is exciting," he said.
"A lot of wool is being sold directly outside the auction system at premiums to the market, especially for large growers that can put containers together, there are some tremendous opportunities with a high degree of complication."
Mr Read is pleased to see the rise of new platforms such as WoolQ and AuctionsPlus as another way to source wool, and sees online volumes growing into spring.
"It is beyond the trial phase," he said. "It is a way we can connect direct with growers and it is efficient and hopefully will pull some costs out of the supply chain."
Mr Read says processing in Australia near the source of their wool remains a big advantage, enabling them to fill orders and process the wool within four weeks. The same order could take 8-12 weeks in China.
Michell Wool owner David Michell says the company has a vested interest in the success of the farming community, but is optimistic the flock - which is at the lowest numbers in more than a century - has hit its lowest levels, as long as good seasons prevail.
"Protein is a big driver globally. Sheep are a good protein source and most sheep have wool we can still find a use for and while there is burr and grass seed that need to be removed, we have the process to do that," he said.
"It may become super niche, but we think we will still have a good business."
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