Interview with Mr Jim Anderton

New Zealand produces about 45 per cent of the world’s carpet wool. It is exported both as fibre, as wool carpet yarn and as carpet.

New Zealand wool is used by almost every wool carpet and rug manufacturer in the world, because of its uniformity, whiteness and strength.

When leading retailers in markets such as the United States want to differentiate their wool carpet as a luxury item of the highest quality, they will usually cite if it is made from New Zealand wool (identified by the distinctive fern symbol, the Wools of New Zealand brand).

New Zealand’s top destination for wool carpet exports in the 2006/7 year was Australia (valued at $92 million). Other markets include the United States (nearly $1.5 million), the United Kingdom (just under $1 million), Japan, Hong Kong, Canada, and Korea.

New Zealand textiles reach a very wide market globally. New Zealand’s wool and fibre industry offers:

-> innovative, quality products and technology – fine wool fabrics, high performance merino clothing, the world’s most luxurious carpets

-> sustainable production

-> uniquely New Zealand design

-> a flexible approach to marketing, delivery and order quantities

In the US particularly, where synthetics dominate the soft flooring market (wool has less than 3% share of the floor-coverings market), we are seeing a surge in interest in high-end wool carpets and rugs. Manufacturers and brand owners are looking to capitalise on the fast emerging trend for products with a robust sustainability story.

For the year ending 2008, NZ textile exports were valued at more than $850 million (NZ dollars).

New Zealand producers and exporters focus on developing the finest quality wool and fibre in the world. Their knowledge of sheep and wool fibre is unmatched and backed by an international reputation for innovation in manufacturing processes and products.

New Zealand produces 14% of the world’s wool and we export 89 per cent of our wool production.

Wool has been one of major export crops since the formation of the modern New Zealand economy 160 years ago. In recent decades, however, the role of wool in our economy has changed dramatically. Forty years ago we exported 237,000 tonnes of clean wool. Last year, that was down to 155,000.

While quantities are down, our wool exports are much more likely to be higher value, with advantages driven by our ability to apply sophisticated technology to our primary sector.

Most New Zealand wool is carpet wool, with fibres around 37 microns. It is cleaner and stronger than competing carpet wool and free from dark fibres.

Wool for clothing, usually from merino sheep, is typically twice as fine as carpet wool. Our soft merino wool (as fine as 13 microns) is whiter and stronger than competitors’ products. It is used in comfortable, fashionable performance apparel that can be worn year-round. Exports of New Zealand merino wool have increased significantly in recent years as consumers recognise that wool isn’t just a cold-weather fibre.

Such is the quality of the raw merino fibre from New Zealand that prestigious Italian textile company Loro Piana makes its finest wool fabric from New Zealand merino.

New Zealand wool fibre is exported to over 50 countries. The leading importing countries for New Zealand wool in 2007/8 were Australia, China, Italy, United Kingdom, India, the United States, Belgium, and Germany. For all these countries except China and Italy, carpets and rugs were the dominant end product. In addition to fibre, a significant amount of carpet yarn was exported from New Zealand to Australia, the United States, Thailand and Malaysia. Almost four million square metres of carpet was exported, mostly to Australia.

Rugs are a significant end-use for New Zealand wool because of its bright white base colour, which allows vibrant, stylish products to be made. Hand knotted and hand-tufted carpets using NZ wool are produced in the East Asian countries of India, Nepal and Iran.

New Zealand has the most cost-effective scouring industry in the world. We also export our scouring technology to other wool-producing and processing countries. Glacial wool is a scoured product from New Zealand of unprecedented brightness and cleanliness used in the manufacture of premium carpets and rugs, where colour is critical.

Global consumers are showing increased interest in sustainable products. They want carpets that don’t emit volatile organic compounds and organic denim jeans. This is an important opportunity for us: New Zealand wool, grown on free-range sheep that feed on grass, is uniquely sustainable.

New Zealand is also contributing new fibres and textiles to the world:

-Escorial fibre is now grown in New Zealand. It is a luxury natural alternative to cashmere and pashmina, from miniature sheep descended from a flock kept by King Philip II of Spain at the El Escorial monastery.

-Possums are an environmental pest in New Zealand – but their fur is an eco friendly fur hit in some markets. Introduced into New Zealand in 1837, the number of possums in the wild has since grown to over 70 million, posing a significant environmental and conservation problem for native vegetation and wildlife. Possum fur has a hollow fibre structure, making it extremely warm. WoolYarns was the first company in the world to blend possum fur with merino wool. New luxury products that blend possum and merino fibre to produce extreme softness performance and warmth for weight are now readily available.

-Cervelt is a fibre made from the fine layer of down the Red Deer grows during winter to keep it warm in icy mountainous terrain. A revolutionary new process has been developed to collect and refine this rare commodity.

New Zealand is both developing new technical innovations in textiles and applying innovative thinking to its core textile product, wool.

Here are just some examples of technical textile advancements in New Zealand:

Innovative new wool fabrics developed by AgResearch, a Crown Research Institute, include a 'Smart singlet' knitted from fibres that can transmit an alarm signal (from a electrical circuit in the garment) if the wearer is shot or incapacitated; a lightweight, comfortable stab and flame proof wool vest; and a woollen business shirt made from a new lightweight, pure wool fabric that's machine washable and shrink resistant without any chemical treatment.

*Non invasive compression technology (Levana Textiles)

*Technical chainsaw protective wear (Jaedon Enterprises & Manukau Knitting Mills)

*Fabric sensing technology (Zephyr Technology)

*Sustainable merino shrink resistance (Designer Textiles)

*Machine washable wool bed throws (Maxwell Rodgers)

*Easy care sleepwear (South Canterbury Textiles)

Some of the key factors affecting the TCFC industries include soaring global prices for hydrocarbons and the flow-on to synthetic fibre prices, which is making natural fibres more competitive; labour shortages and global shifts in manufacturing; and the burgeoning interest in ‘green’ products and sustainable businesses.

New Zealand produces the best wool in the world. Yet despite increasing demand for sustainable products worldwide, current returns to farmers, particularly for coarse wool, continue to trend downwards. A new sales model is currently being developed with Government support, which will strongly brand New Zealand wool at the premium end of the market.

New Zealand as a country is aiming to be the first fully sustainable country in the world. We will leverage our fibres’ advantages and the sustainability of our production – as well as our overall environmental excellence and traceability – to set apart New Zealand products.

In New Zealand as elsewhere, competitive costs are driving processing and manufacturing offshore. The government provides funding for industry support and capability building, for example, through the DesignTex initiative, a public/private partnership, which aims to link New Zealand textile businesses and build their business expertise, improve production and stimulate investment in the industry.

DesignTex offers training to lift the industry’s business knowledge, foster leadership abilities, link designers with manufacturers, up-skill workers, and promote collaboration within the sector. It is also building relationships with textile industry leaders in the United Kingdom to develop a marketing gateway into Europe.

New Zealand does not subsidise any industry. Our government’s role is to work with industry to remove the barriers to compete in global markets. Our Beachheads Programme, for example, helps businesses access successful international executives in South East Asia, the Americas, the United Kingdom, India, the Middle East and China. We are the world’s most isolated developed country, so the scheme helps our exporters learn from the experience of others and accelerate their market entry and growth.

Increased competition means companies need to differentiate themselves from their competitors.

One way we do this is by making our products more environmentally sustainable than other countries’ exports. Another way is through the Better by Design programme that helps companies integrate design principles though their business. This includes implementing design-led thinking into innovation and production processes, branding and communications, leadership and company culture. Its focus is on ensuring long term, sustainable growth. New Zealand’s Mokum Textiles is an example of a textiles company that has been through the programme.

New Zealand is committed to maximising our connections with the world. For example, we have recently signed the first free trade agreement between China and a developed western economy. This opens excellent opportunities for investment in both directions.

Opportunities such as the DesignTex initiative are helping to create investment-ready opportunities.

The growing interest in sustainable, environmentally friendly products is a very positive trend for New Zealand wool, which is grown on free-roaming sheep that eat grass rather than other types of feed.

New Zealand companies are taking sustainable products to the world. Tapestry Knitwear was the world’s first commercial knitwear company to be organically certified. Icebreaker is pioneering "Baacode", a new traceability system that helps customers trace their pure merino garments through every step of the production process, starting with the New Zealand high country sheep station where the merino roam. Untouched World has an extensive organic cotton and merino sourcing programme.

New Zealand is continuing to develop innovative, high quality textile products.Our focus on sustainable products and businesses is bringing unique products to markets. New Zealand finished products offer distinctive design and inspiration.

Our range of small and medium-sized businesses means that New Zealand is often able to provide highly customised products and produce a range of volumes, down to smaller batch sizes that can be difficult to obtain or less economic elsewhere.

Finally, leading technology, flexible cost structures and highly educated, skilled and innovative people make New Zealand an attractive place to do business and invest.