British Wool is to restructure its operations in a cost-saving move prompted by poor wool prices, largely as a result of poor demand following the Covid-19 restrictions.
The farmer-owned company is reducing its network of grading depots across Britain from twelve to eight from mid-February with the closure of the depots in Irvine, Ayrshire; Porthmadog in north-west Wales; Stamford, Lincolnshire; and Liskeard in Cornwall. The annual saving is estimated at £1.5 million per annum.
Wool from the affected regions will be reallocated to other grading depots, with new Intermediate Depots established in the nearby area to ensure wool producers still have a local drop point with no additional onward haulage charges.
Acting chief executive Andrew Hogley says British Wool has managed to sell the 11 million kilos of last season’s unsold wool it was holding in April, with “decent volumes” moved since August. However, wool prices are still “severely depressed” with a global oversupply of cross-bred wool – mainly from New Zealand but also from other European markets. Demand for carpet wools is especially depressed with little contract carpet market activity from customers such as hotels, offices, cinemas, restaurants, airports and cruise ships due to pandemic restrictions.
“In order for us to maximise the value of producer’s wool, it is critical that we re-shape the business in-line with current market conditions,” states Mr Hogley. “British Wool will be working hard on behalf of its producers to support the recovery of the wool trade and maximise the value of wool.”