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Beyond the Bale : March 2011
3 March 2011 BEYOND THE BALE UPFRONT Getting on with business e are continuing with initiatives to help increase the demand for wool through investments in marketing, innovations and R&D -- from farm to fashion. I would like to inform you of some recent advancements the organisation is making: Campaign for Wool: Following its successful launch in the UK last year, the five-year Campaign for Wool, with support from AWI, will expand globally this year into other key northern hemisphere consumer markets including the United States, Japan, Italy, Germany, Spain and the Netherlands. The Campaign will feature an International Wool Week that aims to educate consumers about wool's unique natural benefits. The Australian rollout of the Campaign is being launched later this month and will include a host of events and promotions. No Finer Feeling campaign: AWI has launched a $20 million global marketing campaign that aims to educate a new generation of consumers about the benefits of Merino wool. In addition to apparel advertisements, influential global fashion industry leaders, such as Margherita Missoni and Alessandro Benetton, are ambassadors for the campaign and the fibre. The campaign will be undertaken in partnership with manufacturers, retailers and the media over the next three years. Biella visit: AWI with assistance from the Italian wool industry last month hosted a tour of the Biella region for Australia's Trade Commissioner & Consul General for Italy Simone Desmarchelier to meet with the major retailers and manufacturers in the region. The purpose of the tour was to provide a greater understanding of the Italian wool textile industry and particularly the importance of Australian fine Merino wool. The visit was welcomed by the Italian industry. Wool interiors: Over the past few months, Woolmark licensees that attended international trade shows for interior textiles have reported some of the strongest interest in their products for many years. Broader micron and crossbred wool is used mainly in the interiors sector. The licensees note that the trend towards natural and biodegradable fibres is creating opportunities for retailers to sell more wool interior products. Wool4Skool: AWI has launched a competition for students to redesign their school uniforms using various wool innovations. The competition aims to build an awareness of the natural benefits and versatility of wool among a new generation. Teachers are also encouraged to get involved -- the competition is aligned with a number of syllabus areas. ISPO trade show: I last month attended the ISPO international outdoor and sports trade show in Munich. An increased amount of outdoor apparel made from Merino wool was prominently on display by a more prevalent number of brands at this year's show. Exhibitors reported that Merino wool is becoming highly regarded and appreciated as a premium natural performance fibre. Cotton Inc projects: On my behalf, AWI's Chief Strategy and Marketing advisor Rob Langtry met with the President and CEO of Cotton Incorporated last month. Mr Berrye expressed great interest in pursuing collaborative research projects and we resolved to work together on mutually beneficial projects. Lenzing Group: I met with the CEO of The Lenzing Group Dr Peter Untersperger last month. Lenzing is the world market leader in man-made cellulose fibres (such as modal and lyocell) for the textile industry, with sales in 2010 estimated at AU$2.4 billion. We discussed the possibility of co-operative programs in both the R&D and marketing arenas, regarding below-the-waist casual apparel, base layer knitwear and fire retardant workwear. Regional analysis of investment: The team at AWI has been objectively determining how much AWI investment is needed in each country of our target markets. The new methodology has brought greater clarity to our investment strategy. China of course dominates as a newly emerging mass consumption and processing hub; however the traditional markets of Europe and North America are from where fashions and style flow and therefore attract good levels of investment as "flagship" markets. Objectively measuring these markets helps us determine the appropriate level of investment and ensure greater expenditure control. Levy income forecast: As the EMI continues to rise in a dramatic fashion, we are analysing the potential ramifications that this will have on AWI's income from the wool levy and corresponding increase in expenditure, where appropriate, on marketing and R&D initiatives. Carbon Farming Initiative: The Federal Department of Climate Change and Energy Efficiency released its "Design of the Carbon Farming Initiative" consultation paper in November. AWI has lodged a response submission, identifying a number of serious concerns that the scheme's design does not support its principles of enabling broad participation for low administrative costs and benefits to land owners. AWI also developed a briefing paper based on our analysis of the document and forwarded it to all state faming organisations and wool representative bodies prior to Christmas to assist in their individual submissions. AWI state networks: AWI state extension networks continue to provide opportunities for woolgrowers and producers to make changes to their production and management practices. To find out about the recent activities of the AWI state networks, read the latest edition of The Network's News newsletter at www.wool. com/networks. Wild dog control: In some areas of Queensland and Western Australia, and along the Great Dividing Range in NSW and Victoria, sheep production is being significantly impacted because of the ongoing damage inflicted by feral dogs. AWI recently sponsored some workshops in WA to help producers best manage the problem -- producers that attended the workshops said they found them very useful. Stuart McCullough CEO, AWI