South Canterbury Textiles
In January, 2006 South Canterbury Textiles was about to close spelling the end of nearly 100 years of textile manufacturing on the site and the loss of 24 jobs.
The plants owner - iconic Kiwi garment manufacturer, Swandri had opted to move manufacturing to China. For a short time the previous owners, Alliance Textiles, continued making upholstery, apparel and protective clothing fabrics on the site but soon decided to shut shop.
Convinced that there is a good future in processing wool onshore and determined that staffs expertise should not be wasted several are second generation employees staff members Andrew Millar, Jay Chavan and Tony Gallagher decided to become shareholders in the business and started searching for a major investor.
The three men had been head-hunted from Australia by Alliance and despite overseas job offers, opted to instead back their belief in the Timaru business.
The workers have specialised skills which otherwise would have been lost to the industry, says director, Jay Chavan.
Merino farmers and stud ram breeders Russell and Jeanette Emmerson of Forest Range, were quick to recognise the opportunity to realise their longstanding vision of value-adding their wool in New Zealand, bypassing the lengthy, profit-destroying pipeline between woolgrowers and retailers.
Merino fibre is at an all-time fashion high but a 30-year price low, says Russel. There has been a huge systems failure in delivering returns to the grower.
The plant was closed for only three weeks, before re-opening in February, 2006.
Another attraction was the involvement of co-directors Millar, Chavan and Gallagher who offer many years of experience in the New Zealand and Australian textile industries and valuable industry contacts.
Swandri has helped out by offering two year contracts for South Canterbury Textiles to continue manufacturing its 100% wool blankets and mohair throws on a commission basis.
South Canterbury Textiles today
South Canterbury Textiles currently sources yarns to manufacture a wide range of woven products for a number of clients. These include blankets, throws, commercial upholstery apparel fabrics and high performance textile fabrics (heat, flame and molten metal-splash resistant) made from imported yarns made mostly from strong, crossbred wools.
Very little Merino wool has been used, apart from a spinning yarn incorporated into blankets.
The vision
Ultimately, the aim is for South Canterbury Textiles to become a significant-sized boutique producer of 100% New Zealand made woven Merino fabric. Up to 10% of the Merino clip would be utilised initially from Forest Range - with the potential for further growth. The five-year goal is to have a vertically integrated manufacturing facility, from fibre to finished fabric, says Jay.
The company is now entering an expansion phase. Step one was the purchase of Auckland-based KD Weave, with the companys order-book providing a foothold in Australia and the US. The Auckland weaving, dying and finishing equipment is now functioning in Timaru.
Step two is importing a near-new topmaking line and spinning mill, especially designed to process superfine wools. Transported in eighty 40-foot containers, the equipment will arrive in Timaru in March to be fully functional by the end of this year.
The company has purchased land at nearby Washdyke where a building will be constructed to house the larger factory. When the new plant is up and running, new staff will be sourced taking the workforce to 65-70. An apprenticeship scheme is being developed, to encourage young people into the industry so expertise is not lost.
The aim
The Emersons motivation in buying into South Canterbury Textiles was to add value on-shore to their Forest Range clip and those of ram-buying clients. Their clip gets finer by the year, with 100 tonnes of 15 micron wool grown this year and significant volumes of 12 and 13 micron wool. They say the opportunity to process their clip in New Zealand will add certainty to their investment in fine wool-growing.
Each year when we start up the hand-piece, we have no guarantees about the price well receive with a lot of huge overseas commercial entities relying on their cut of the final price of our raw materials for their profits.
Once the new plant is fully functional about 600 tonnes of fabric will go out the door, requiring about 1200 tonnes of greasy wool from a total merino clip of around 7000 tonnes. Wool will be purchased directly from super-fine fibre growers. If the numbers stack up, well keep expanding.
NZ-made has global appeal
South Canterbury Textiles shareholders have no doubts about its success.
Increasingly, the superior quality of New Zealand versus China-made garments is being recognised not only in New Zealand but globally, says Jay. Examination of clothing previously manufactured in New Zealand and now in China, reveals huge differences in quality. A common fault is that the micron range of fibre is extremely variable within one product, due to blending of wools to an average micron to save costs rather than using pure lines.
Hes observed increasing resistance to the made in China label, especially in the US.
Keys to the companys success will include targeting a global market, as New Zealand is not large enough to absorb sufficient product. Also, a wide product range will be retained to protect the company against fluctuations in demand either due to the season (as with school uniforms, which mostly sell between November and March) or fashion (a danger when making fashion items).
A range of lines will be kept such as the fire retardant fabrics which sell well throughout the year. Research and development will also keep fresh ideas flowing
A number of existing South Canterbury Textiles clients are showing that it can be profitable to manufacture woollen garments on-shore, says Russel. Not only do New Zealand customers want to buy local, but the market is global with increasing resistance to the made in China label, especially in the US.
Ultimately, the companys textiles will be 100% made in New Zealand, from the growing of the fibre to the spinning of the yarn and weaving of fabric.
Jay has no doubts about the profitability of the business. Well aware of the costs of outside commissioning of processing steps such as scouring and spinning, they say there are considerable savings in doing all these processes under one roof.
Jay is confident that South Canterbury Textiles will succeed where other New Zealand based woollen manufacturers have failed.
The plants owner - iconic Kiwi garment manufacturer, Swandri had opted to move manufacturing to China. For a short time the previous owners, Alliance Textiles, continued making upholstery, apparel and protective clothing fabrics on the site but soon decided to shut shop.
Convinced that there is a good future in processing wool onshore and determined that staffs expertise should not be wasted several are second generation employees staff members Andrew Millar, Jay Chavan and Tony Gallagher decided to become shareholders in the business and started searching for a major investor.
The three men had been head-hunted from Australia by Alliance and despite overseas job offers, opted to instead back their belief in the Timaru business.
The workers have specialised skills which otherwise would have been lost to the industry, says director, Jay Chavan.
Merino farmers and stud ram breeders Russell and Jeanette Emmerson of Forest Range, were quick to recognise the opportunity to realise their longstanding vision of value-adding their wool in New Zealand, bypassing the lengthy, profit-destroying pipeline between woolgrowers and retailers.
Merino fibre is at an all-time fashion high but a 30-year price low, says Russel. There has been a huge systems failure in delivering returns to the grower.
The plant was closed for only three weeks, before re-opening in February, 2006.
Another attraction was the involvement of co-directors Millar, Chavan and Gallagher who offer many years of experience in the New Zealand and Australian textile industries and valuable industry contacts.
Swandri has helped out by offering two year contracts for South Canterbury Textiles to continue manufacturing its 100% wool blankets and mohair throws on a commission basis.
South Canterbury Textiles today
South Canterbury Textiles currently sources yarns to manufacture a wide range of woven products for a number of clients. These include blankets, throws, commercial upholstery apparel fabrics and high performance textile fabrics (heat, flame and molten metal-splash resistant) made from imported yarns made mostly from strong, crossbred wools.
Very little Merino wool has been used, apart from a spinning yarn incorporated into blankets.
The vision
Ultimately, the aim is for South Canterbury Textiles to become a significant-sized boutique producer of 100% New Zealand made woven Merino fabric. Up to 10% of the Merino clip would be utilised initially from Forest Range - with the potential for further growth. The five-year goal is to have a vertically integrated manufacturing facility, from fibre to finished fabric, says Jay.
The company is now entering an expansion phase. Step one was the purchase of Auckland-based KD Weave, with the companys order-book providing a foothold in Australia and the US. The Auckland weaving, dying and finishing equipment is now functioning in Timaru.
Step two is importing a near-new topmaking line and spinning mill, especially designed to process superfine wools. Transported in eighty 40-foot containers, the equipment will arrive in Timaru in March to be fully functional by the end of this year.
The company has purchased land at nearby Washdyke where a building will be constructed to house the larger factory. When the new plant is up and running, new staff will be sourced taking the workforce to 65-70. An apprenticeship scheme is being developed, to encourage young people into the industry so expertise is not lost.
The aim
The Emersons motivation in buying into South Canterbury Textiles was to add value on-shore to their Forest Range clip and those of ram-buying clients. Their clip gets finer by the year, with 100 tonnes of 15 micron wool grown this year and significant volumes of 12 and 13 micron wool. They say the opportunity to process their clip in New Zealand will add certainty to their investment in fine wool-growing.
Each year when we start up the hand-piece, we have no guarantees about the price well receive with a lot of huge overseas commercial entities relying on their cut of the final price of our raw materials for their profits.
Once the new plant is fully functional about 600 tonnes of fabric will go out the door, requiring about 1200 tonnes of greasy wool from a total merino clip of around 7000 tonnes. Wool will be purchased directly from super-fine fibre growers. If the numbers stack up, well keep expanding.
NZ-made has global appeal
South Canterbury Textiles shareholders have no doubts about its success.
Increasingly, the superior quality of New Zealand versus China-made garments is being recognised not only in New Zealand but globally, says Jay. Examination of clothing previously manufactured in New Zealand and now in China, reveals huge differences in quality. A common fault is that the micron range of fibre is extremely variable within one product, due to blending of wools to an average micron to save costs rather than using pure lines.
Hes observed increasing resistance to the made in China label, especially in the US.
Keys to the companys success will include targeting a global market, as New Zealand is not large enough to absorb sufficient product. Also, a wide product range will be retained to protect the company against fluctuations in demand either due to the season (as with school uniforms, which mostly sell between November and March) or fashion (a danger when making fashion items).
A range of lines will be kept such as the fire retardant fabrics which sell well throughout the year. Research and development will also keep fresh ideas flowing
A number of existing South Canterbury Textiles clients are showing that it can be profitable to manufacture woollen garments on-shore, says Russel. Not only do New Zealand customers want to buy local, but the market is global with increasing resistance to the made in China label, especially in the US.
Ultimately, the companys textiles will be 100% made in New Zealand, from the growing of the fibre to the spinning of the yarn and weaving of fabric.
Jay has no doubts about the profitability of the business. Well aware of the costs of outside commissioning of processing steps such as scouring and spinning, they say there are considerable savings in doing all these processes under one roof.
Jay is confident that South Canterbury Textiles will succeed where other New Zealand based woollen manufacturers have failed.