Shortform report of Biella Merino Programme. Written by Richard Gloag, Blythe Rees-Jones, Nick Aubrey, Simon Causer

1. PROJECT :
New Zealand Biella Merino
Programme 2009
TITLE :
Short Form Summary
AUTHORS : Richard Gloag, Blythe Rees-Jones, Nick Aubrey, Simon Causer
PREPAREd FOR : Merino Inc, The New Zealand Merino Company, Meat & Wool NZ
dATE : 15/06/09
KEYWORdS : Italy, Biella, Master, Noble Fibre, Merino
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2. Introduction
This overview complements a full report (available through Merino Inc) prepared by the four-person
team that travelled to Biella, Italy in February 2009 as part of the 2009 Biella Merino Ambassador
Programme. The group included representatives from merino farming, wool marketing and sales, and
design/fabric manufacturing sectors in NZ, as well as a textile technologist, whose role was to assist
the team in interpreting their observations of the Italian wool processing industry.
The team was hosted by the Biella Masters Programme for two weeks and had the opportunity
to observe wool scouring and top making, worsted and woollen spinning, fabric manufacture,
garment make-up and retail. They also met with leading figures involved with design and business
management functions within the Italian textile industry.
A previous team from New Zealand, who visited many of the same plants in 2007, provided a detailed
overview of the individual operation of these (which has been added to with a set of site visit notes
from the current team). Hence, the 2009 report focuses on the business models adopted by these
companies, their approaches to innovation, responses to market pressures, requirements in terms of
fibre supply, and vision for the future. Specifically, it discusses:
The economic environment in which the Italian textile industry operates
Production, processing and marketing of NZ Merino fibre
Drivers for design and sustainability
The Italian industry is currently facing key challenges around maintaining and growing the market for
fashion and business apparel, made even more difficult by the current economic climate. However,
being regarded as the world’s leader in worsted apparel manufacture, and with its considerable past
investment in plant, technology and people, it is well placed to achieve this.
Key learnings for the team whilst in Italy are included in this summary.
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3. General Aspects Economic/Business Models
There is an exceptionally high degree of complexity and capital investment involved in taking The current financial crisis is having a major impact upon the industry, with several mill closures
greasy wool through to finished product. announced in the short time the team were in Italy, and most of the factories visited being down
in production between 25-45% from where they were six months previously.
The view amongst Italian processors is that NZ wool is, on average, longer, whiter, and stronger
than wools from other countries and has a lower level of vegetable matter contamination, but still No foreseeable change in this situation is forecast for at least 12 months, and this will have a
has room for improvement in some aspects of style. significant impact upon raw wool purchasing practices in the interim – particularly given it may
take up to 12 months for wool to be processed from greasy stage to finished fabric.
The Italian industry has very specific requirements in terms of wool quality and preparation
which can differ substantially from those required for wools destined for other product Some mills are currently utilising the government run Cassa Integrazione Guadagni (CIG) fund,
categories – for example the active outdoors market. which pays a worker an 80% retainer in times of economic downturn (in a similar manner to
which the NZ ACC scheme will subsidise wages in event of injury).
Italy remains an important market for NZ wool - particularly those wools at the finer end of the
merino clip. Individual mills within the Biella region have a high level of understanding of merino growing
practices in NZ and Australia (many of their staff having worked on stations and some mills even
owning stations) and they maintain detailed records of wool offerings from individual properties.
Without exception, the mills have an intense focus on product quality, and this has been a major
driver for investment in automation and capital equipment.
The processors were passionate about wool, and about the products they produce from it.
Many mills were family owned and operated businesses, but are increasingly integrating outside
expertise into their senior management and board structures.
Asia was viewed as a significant threat to Italy’s manufacturing base – but also as a significant
market for product. Another key emerging market for high end apparel that was quoted by
several mills was the former Soviet Union.
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4. The ‘Made in Italy’ brand remains important to many processors, although some questioned
Wool Preparation and Processing
its defensibility, citing the lack of understanding about what actually constitutes ‘Made in Italy’.
Some mills preferred to build equity in their own brands and those of their customers instead. The Italian industry relies almost exclusively on wool supplied from elsewhere in the world
– the bulk of which comes from Australia and NZ. Other fibres (eg. cashmere and alpaca) are
processed also – often in combination with merino – but are less significant in terms of their
overall volume.
Key differences exist between the worsted and woollen processing routes – the latter being
considerably shorter and requiring different fibre specifications than the former. They also
produce yarns quite different in properties – those from the worsted system tending to be finer
and less hairy than from the woollen system.
The top five things they are looking for in wool they purchase include good strength, style,
micron, even (reasonably long) length and absence of faults (colour, VM, etc).
Wool over 40 N/ktex was preferred for processing, and NZ wools scored more highly for their
lower incidence of mid-point breaks than wools from many other countries. Having said this,
several also commented that its more even diameter-length profile resulted in it having a slightly
harsher handle than wools with a discernable thin point. This confers a lower strength, but also a
lower resistance to bending.
Outside of ranges such as Zelander by Loro Piana, blends of 100% NZ wool were virtually
unheard of, with some processors combining up to 30-50 lines of wools with different
characteristics to create the optimal batch characteristics for processing and end product
performance.
Blends of NZ wool with 70-90% Australian wool were typical.
Style was an important factor governing purchase decisions and a high importance was placed
on the frequency, amplitude and evenness of crimp (which has a strong influence on the
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5. processing characteristics and strength/extensibility of resultant yarns). The Australian handling of anti-mulesing campaigns by groups such as PETA and SAFE was
widely lamented.
Many mills exhibited strong negativity towards Soft Rolling Skin-type wools as this style of wool
was not always suited to their processing system.
design and Sustainability
Aspects of fibre measurement change during processing – for example, the diameter of wool
measured in top form is generally 0.2 microns finer than in wool prior to processing. design and fashion flair is a major differentiator for the Italian worsted industry. They are seen
to be the centre for this type of activity worldwide, affording them a key point of difference from
competing apparel and fabric manufacturers from other parts of the world (eg. Asia).
Several mills visited (eg Loro Piana and Ermenegildo Zegna) run international competitions to
encourage the pursuit of wool quality – awarding substantial prizes for the producers of highest
quality fleeces and bales within the major merino producing nations of the world (Australia, NZ, The majority of Biella mills rely on the three top making plants remaining in Italy for their fibre
and South Africa). processing.
An optimal distribution of fibre length is desirable in a blend to facilitate efficient fibre processing Some have taken ownership stakes throughout the supply chain (with activities spanning from
and even yarn formation. Short fibres result in a high degree of wastage and poor yarn farm ownership through to garment retail) while a few continue to act simply as commission
properties - strength, pilling, etc. Long fibres result in breakage and similar problems as if short processors (eg. fabric weavers/finishers).
fibres were present in the first place. Too even a fibre length will result in problems during fibre
drafting and hence will affect yarn evenness – so some variation is necessary.
All mills visited had sophisticated quality control and testing facilities which were utilised to
control routine production, but also to support their own product development and design work.
Traditionally many mills have preferred to buy greasy wool through the auction system as it
allowed them to select from the widest range of wool types, and obtain these at a price most
The fact that wool was a natural fibre, with its own unique set of properties, was seen as a major
acceptable to them. However, some mills are re-considering due to the potential benefits of
point of difference by Italian designers, and their current focus was on promoting this fibre
direct supply contracts.
uniqueness as part of an overall package of garment/fabric attributes.
Numerous mills commented on pressure from their customers (weavers, brands and, in some
Some manufacturers utilised the IWTO ‘Super X’ and ‘X’ labelling scheme as a means of
cases, consumers) to produce fabrics from unmulesed wool. Many had also been contacted
differentiating their products on the basis of wool micron – although others saw less value in this
directly by animal rights groups such as PETA. In this sense it appears the suiting market is
branding scheme, noting that maximum mean fibre diameter was only one determinant of fabric
starting to catch up with the active outdoors market in terms of its demand for ethically produced
performance, and didn’t convey any additional information.
wool – and several manufacturers expressed concern about the ability of producers to supply
enough unmulesed wool to meet this demand.
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6. Production of fabric was split into Autumn/Winter and Spring/Summer collections, with some
mills producing both men’s and women’s collections, whilst others had a definite focus on either
Conclusion
one or the other.
It is hoped that the insights the team gained into the Italian worsted industry, wool processing and
marketing, fashion and design, and raw material requirements can now be built upon (through
Suit manufacture was a very complex process – with each suit jacket, for example, consisting of interaction with growers, and key users of NZ merino) and translated into commercial opportunities
30-40 individual components, brought together in 125-130 individual production steps. for the NZ merino industry.
There has been a significant shift in recent years for Italian manufacturers to create customer-
facing brands. The development/acquisition of retail networks has been a major part of this for
companies such as Zegna, Loro Piana, Barbera, etc – while others have remained simply as fabric
suppliers to a multitude of different brands.
The geographical location of the Biella textile industry (at the foothills of the Italian alps) was
originally chosen for its proximity to high quality water supplies (as a raw material utilised in
production, but also as an energy source) but legislation strictly governs discharges to these
bodies of water which, for some mills, amount to small streams, only several meters in width.
All mills visited had installed some form of waste water treatment system, with the more
advanced plants employing sophisticated filtration, aeration and chemical flocculation systems –
coupled with high levels of water reuse/recycling within the plant itself.
Pesticide residues within greasy wool is an issue potentially on the horizon for some scourers,
although those spoken with suggest the technologies in place at the moment will enable them to
continue operating at current levels for some time yet.
Most mills had eliminated contentious chemicals from use in their dyehouses, and significant
gains have been made towards minimising water usage in wet processes.
Few if any chemical auxiliaries are employed in fabric finishing, outside of detergents.
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