I.W.S. Looks To East As Well As West

Press, Volume CX, Issue 32209, 30 January 1970, Page 9

I.W.S. Looks To East As Well As West

Because of its international charac* ter —it is a world organisation—and also because its prime concern is for the • interests of its grower sponsors, the • International Wool Secretariat has to help to stimulate the. use of wool wherever it can, but this can result in some difficulties in that it can bring the textile industry of one country into competition with that of 'another.

Helping industries in low labour cost countries or where they are strictly under the control of the State can, for instance, increase their competitiveness in markets in Western European countries to the disadvantage of local industries, which have in many cases been users of wool for many years. At the same time expansion of the use of wool in countries behind the Iron Curtain can open up new markets for wool and possibly particularly for the class of wool that New Zealand produces. , The position is well summed up by regional director of the secretariat for Northern and Eastern Europe and the Middle East, Dutchman Mr Jan ter Haar. He says: “We are on a seesaw between east and west whatever happens.” The secretariat already has Woolmark licensees in Czechoslovakia. Poland and Jugoslavia, where it has licensed the national industry organisations which sublicence the factories under their jurisdiction. A condition of these licences is that before these countries can export Woolmark goods they must promote Woolmark on their domestic markets for two years. Mr ter Haar commented recently: “We did not want to make life any harder for manufacturers in the West” The International Wool Secretariat has found East: European countries tough : negotiators but once they j have come to an agreements with the secretariat they have been found scrupu-i lously honest and sticklers! for the rules, even more so! than some Western! interests. Where Woolmark I licences have been granted I periodic checks have re-1 vealed no breaches of I quality standards. The pro-! ducts are mainly of a middle! class quality which sell at! fairly low prices. Mr ter Haar says that the textile industries in East European countries are highly organised and once the secretariat has been able to get to grips with them they have been able to make progress, but it takes time to get to grips with them. He talks of it taking about two years to become accepted in such a country. They (the East European countries) have often found it hard to understand the purposes of an organisation like the I.W.S.—that it is there just to promote a fibre. The secretariat now has agreements with Russia, Poland, Czechoslovakia, and Jugoslavia. And likely countries next on the list for I.W.S. attention and help are Hungary and Romania. But Mr ter Haar says that a major problem in all of this is that Western manufacturers feel antagonised by the aecretariat’s activities behind the Iron Curtain. The same manufacturers are eager and willing to sell tops to the Esst Europeans but they are averse to the secretariat giving them Woolmark. But in spite of this predicament Mr ter Haar says

that the East European countries cannot be ignored when, for instance, Imperial Chemical Industries is buildan enormous synthetic plant in Russia that could supply all the needs of England. Quite simply wool interests have to be on the spot advancing their interests there. Mr ter Haar says that Far Eastern textile manufacturers are disliked even less by Western manufacturers, because not only do they turn out a first class product but at prices much below what West European manufacturers can compete at. The situation is, perhaps, highlighted in Sweden where something like 80 per cent of knitwear is imported from the Far East at price levels which are quite beyond the capacity of local industry to compete at. And here the official Government policy is to let local industry go to the wolves, on the basis that if they can buy these commodities more cheaply elsewhere why not and concentrate local effort on other things.

Mr ter Haar sayt that there are complaints about dumping by Far Eastern and East European industries, but it is hard to prove these because of manipulation of foreign exchange so that there are often three or four levels of exchange rates. Some Western manufacturers may, however, get a head in front of their lower cost competitors in working with the secretariat on the evaluation of new processes and products, and this may give them at least some temporary advantage. While East European countries would like to increase their own production of wool, they have meantime to buy more wool. Manufacturers in this part of the world are also anxious to improve the quality of their products and the efficiency of their industries and the secretariat is interested in creating a demand for good quality products both in the minds of consumers and the industry. One of the ways of improving quality standards is seen as increasing the content of wool in blends—there is little pure wool production in these parts of tile world.

It is felt that as far as wool imports into these areas is concerned, the demand in the early stages at least could be more for wool of New Zealand types than for the finer qualities. The inquiry, according to Mr ter Haar, could be more for good ' quality medium priced fibres. Russia is in the position of not being able, from her own resources, to keep her own people happily dressed. She has placed big orders for tops and also finished garments in Europe—one order was for a million suits. And when she buys wool products she specifies Woolmark standards indicating confidence in the quality symbol. As yet, technically, the industry in the east is far behind the west, with Poland and Czechoslovakia being ahead of the Soviet Union. At this stage the main form of help from the secretariat is technical assistance and know-how, involving use of manpower. Actual expenditure is not large. Thus the manufacturing services section of the technical centre of the secretariat at llkley in Yorkshire in England is in contact with the Soviet industry.

The section is headed by a Swede, with long experience in the wool textile industry and an expert in wool textile engineering. He is Dr A. Johnels. Dr G. Laxer, director of product development and technical service for the 1.W.5., says that in 1908 a formal agreement was reached between the secretariat and the Soviet Union for equal exchanges and this had brought the manufacturing services section into contact with the Soviet. Dr Johnels said he had met people in the Soviet Union from the ministry to manufacturing levels and had visited spinning, weaving and finishing and making up factories. He said that the secretariat was working with the Soviet Union in the complete re-organising of a spinning mill.

Dr Laxer said that from such effort they would be looking over the years for Increasing purchases of wool by the Soviet Union. The objective of the manufacturing services section, Dr Laxer said, was through assistance in increasing mill efficiency to enable better products to be produced making them more profitable to industry and the products also more competitive with synthetics, with the end result of increasing the demand for wool. In reviewing his whole region, Mr ter Haar said that the major problem was the ever increasing production of synthetics—whereas a few years ago it was largely confined to the United Kingdom and the United States—it was now coming from many countries and under many brand names, and accentuating the problem was also the production of unbranded synthetics emanating from the Far East and also East Europe, which were sometimes up to 50 per cent cheaper than the branded products. Industrial mergers in Britain, and starting now to spread to Germany and Holland and likely also to come to France and Italy, also brought with them problems in that big organisations interested in profits and volume of production could be fibre neutral and interested in production at fixed prices. Retailers played a big part in the Western European market exerting pressure on manufacturers and using their own brand names.

The United Kingdom was still the most important

market in Western Europe, he said. It was also the most sophisticated market and because of the brand names that were used and their importance as a mark of quality, it was more difficult to get Woolmark on to products than in Germany, which was much more neutral and less brand conscious.

Mr ter Haar said that the stage had now been reached where it was possible to have a manufacturer producing a Woolmark product but it lost its Woolmark identity in the pipe line. Initially it was necessary to have manufacturers accept Woolmark—now the emphasis was on the retail trade. And in some cases the secretariat had to buy its way in —if Woolmark was not in the large stores in London, Amsterdam and Dusseldorf then “you may as well give up.”