WELLINGTON - The $2 million McKinsey study of the wool industry has started identifying specific opportunities, strategies and structural options, according to the independent stakeholders group working with the consultants.
McKinsey executives have made their fourth monthly report to the group, and its chairman, Ian Farrant, said it was gratifying to
see some possible solutions to the wool industry's problems.
He declined to specify what sorts of ideas were being put forward, and said those details would have to come from the consultants when they released their report, probably in April.
Mr Farrant said some "options and probabilities" were being put up to meetings of farmers.
As the sequence of these meetings progressed, the concepts were likely to become more detailed.
Some industry observers have warned farmers to expect "unpalatable" results from the review.
These may include conclusions that some types of wool they produce do not have a good future.
The review is expected to focus also on constructive steps, such as trying to build on existing expertise in molecular biology and sheep genetics to selectively breed flocks for specific fibre markets, or even animals resistant to parasites and disease to make it easier to switch to organic production methods.
Mr Farrant said the Wool Industry Development Plan, which his group was overseeing, was expected to take five months.
During this time there would be extensive interviews with participants in wool production, processing, international manufacturing and marketing.
The three key steps identified by McKinsey were to "stem the tide," "get ahead," and "reap rewards."
This meant stemming the tide in the long-term decline in wool prices to achieve a more stable long-term price expectation, getting ahead by achieving significant productivity gains and reaping the rewards by identifying a return on capital in line with the capital cost.
Mr Farrant said a key focus was the relative economics and profitability of the three main wool categories of fine, mid-micron and strong and identifying necessary long-term changes in production.
"This may lead to quite significant recommendations for shifting the current micron/meat mix and identifying changes in emphasis between pure-bred and crossbred flocks to maximise the economic return to farmers," he said.
The structural changes being contemplated were potentially very significant and covered the entire spectrum of the industry from the beginning of the production cycle to the end consumer, often on the other side of the world.
"This is ... a thorough investigation of the economics and potential of the entire industry," Mr Farrant said.
The use of technology was critical and had developed to the extent that it had applications in all stages of the chain.
"This is not just about biotechnology and genetics but about how technology can be harnessed for everything from farm supply procurement to sale, processing and international marketing."
The independent stakeholders' group has set four grower/industry meetings for this month.
They will be held at Masterton on February 14, Waipukurau on February 15, Gisborne on February 16 and Whangarei on February 17.
- NZPA
WELLINGTON - The $2 million McKinsey study of the wool industry has started identifying specific opportunities, strategies and structural options, according to the independent stakeholders group working with the consultants.
McKinsey executives have made their fourth monthly report to the group, and its chairman, Ian Farrant, said it was gratifying to
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