Domestic capital injection

Australian investors look to wool


Wool
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While wool remains a high risk industry and often fails to attract foreign investment, buoyed returns are enticing domestic capital injections.

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AWTA's Robert Wang, ACBC chair Barry White and Tianyu Wool president Quignan Wen.

AWTA's Robert Wang, ACBC chair Barry White and Tianyu Wool president Quignan Wen.

Local investors’ capital injection

WHILE wool remains a high risk industry and often fails to attract foreign investment, buoyed returns are enticing domestic capital injections.

Wool has struggled to appeal to foreign investors focused on “food security and safety”, according to Australia China Business Council agribusiness and food chair Barry White.

Mr White said woolgrowers were responding to their eroding terms of trade by increasing productivity, with the recent high times triggering a period of consolidation and expansion of family operations. 

“Activity is likely to come from private investment – from local graziers consolidating farm businesses and from local fund managers– more so than overseas investors,” he said.

Investors expect by having direct access to raw wool would enable price control and help manage supply, although Mr White said it was more complex.

“A number of Chinese investors assume by buying a farm you eliminate the middle men. Investors need to understand the post farm services involved in wool marketing and exporting and be prepared to pay for them,” he said. 

Wool top-maker giant, Tianyu Wool, purchased Lal Lal Estate, Yendon, Victoria, in 2014.

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