AWI’s CEO says ‘tough choices’ had to be made when crafting its recently revealed three-year strategic plan

Australian Wool Innovation’s top boss says the company will have to make “tough choices” as its projected income falls to its lowest level in more than a decade and it unveils a new roadmap for the next three years. The woolgrower and Federally-funded body released its three-year strategic plan as well as its separate annual operating report this month, with both detailing how it plans to enhance the profitability, international competitiveness and sustainability of the industry. Included in the documents was a $28.6 million reduction in forecasted revenue during the next three years, compared to that as forecasted in the 2022-25 strategic plan, a drop of more than 14 per cent. Despite this, revenue was forecasted to increase over the next three years from $55m to $59m with the largest contribution coming direct from the wool levy at a total of more than $94.55m. Government contribution will reach the lowest it has since before 2019 in the 2026-27 financial year at nearly $14.2m, however it will contribute a total of more than $43.2m to the revenue over the next three years. The plan also revealed a nearly $56.5m reduction in total expenditure in terms of program costs and admin. Notably, while there will be a $54.44m decrease in program costs, admin costs will see a $2m increase, benefitting the 133 staff in 12 offices worldwide including Australia, China, France, Germany, India, Italy, Japan, South Korea, USA, Turkey and UK. Chief executive John Roberts said AWI was facing financial challenges and thus will rely on what it receives in revenue. “This means that the company’s level of expenditure in R&D and marketing will be reduced this year compared to last year,” he said. Mr Roberts said the company would continue to invest in those areas that woolgrowers have indicated are most important to them. The plan set out seven key priorities under two key pillars, the first of which is covers demand growth and fibre advocacy, and the second covers sustainable and profitable wool-growing. Breaking down the financials, $32.2m has been allocated to pillar one — majority of which was allocated to demand creation and fibre advocacy with $21.4m, followed by $10m to trade engagement and $805,000 to emerging markets. Pillar two has been allocated $13.5m, with the largest portion of $5.1m allocated to sustainable, profitable sheep production, followed by $3.1m to stakeholder engagement. The success of each priorities will be measured against key performance indicators. The most notable of which include more than 10 new product innovations, a 10 per cent increase in Woolmark licensees, successful launch of five core Woolmark+ programs, the adoption of multiple R&D initiatives implemented and adopted, all by by 2028. In his chairman’s report, Jock Laurie — who declined this week to comment further — said AWI remained focused on delivery for the future of wool-growing, despite some difficult farming conditions across many regions and challenging economic circumstances. The plan release comes at a time when the $2.7 billion industry is under pressure, specifically in terms of flock number reduction and a large number of farmers transitioning to grain, particularly in WA. “Focusing on productivity improvements in your wool-growing enterprise is more likely to increase profits than moving to a different enterprise,” Mr Laurie said. The plan was produced in consultation with woolgrowers and wool industry bodies and was shaped by woolgrowers’ priorities, WoolPoll 2024 and the broader financial position of the company. Operating plans for actual expenditure will be released annually with the 2025-26 program expected to be published in the coming days.