PR - Sheep's Back To Mill: The Case Of The South African Wool Industry

South Africa has a strong interest in maintaining its position in the international wool market. The low level of uniqueness between different wool producers internationally makes it difficult for countries to oppose the challenges and to remain competitive in the rather homogeneous wool market. Hence, structuring domestic cost information in a way that’s globally comparable, presents a methodology through which managerial information could be gathered for both individuals and the industry. This will allow the South African industry to benchmark itself against the leading world producers. A survey approach was employed to determine the cost structure of the South African wool industry. Results indicated that although South Africa has a competitive advantage in the primary production phases, marketing cost and the countries location in relation to the main wool markets prohibit the local industry from obtaining a competitive advantage over its Australian counterpart.

Key words: wool fibers, cost structure, benchmark