Chargeurs Expects Sharp Declines in Earnings
According to their outlook for 2005 earnings, Chargeurs says they will be impacted by the sharp decline in margins in their two wool businesses.
China?s powerful competitive advantage in the textile and apparel industry, the unfavorable exchange rate for production operations in the euro zone versus the dollar and Asia currency zones and global over-capacity in the wool-combing industry all led Chargeurs to step-up the pace of refocusing their core business in China, by retaining primarily the wool-combing operations in South American, South Africa and China.
In addition, the massive surge of Chinese textile imports into Europe has also impacted their fabric business. In response, Chargeurs Fashion has been created to focus on marketing and design operations.
Australia?s Shorn-Wool Production Expected to be Lower
According to the Australian Wool Innovation (AWI), Australia?s shorn-wool production will be slightly lower in 2005-2006 because of the drought. AWI predicts next year?s wool season will be down 1 percent compared to this year, with shorn-wool production tipping at 470 million kg.
In addition, the fleece weights will be lower because of the dry autumn in the eastern states and South Australia.
Elders Eyes China for Processing Plant
Elder?s Australian topmaking facility closed its doors on July 29 in Parkes, New South Wales. The general manager of wool says that Australia cannot compete against the cheaper Asian labor and that Elders is looking at all processing options.
One option could be the opening of a wool-processing plant in China. Elders is currently processing wool in China; however, the plants are owned by other companies. Other locations in which the company is processing in their own plant is Turkey and Europe.
AWEX-ID Representative Visits ASI
AWEX-ID, or the Australian Wool Exchange Industry Description, continues to be a major priority for the American Sheep Industry Association (ASI). ASI is working with the U.S. wool infrastructure on the implementation of AWEX-ID for U.S. wools and encourages the use of the system to appraise and record the non-measured characteristics of greasy wool. Mark Graves, chief executive officer at the Australian Wool Exchange Limited, visited the ASI office in Denver, Colo., in July to solidify the contract to utilize AWEX-ID in the United States.