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Contacts
Chairman
Richard Bowden
Secretary
Robert Richardson
Directors
Peter McDonald
Richard Bowden
German Freyre
Robert Richardson
Office Contact
Operations Manager
Eduardo Casapia Cannon
Business Address
Unit 2, 114 Fairbairn Road
Sunshine, VIC, AU, 3020
Ph: (03) 9311 0933
Fx: (03) 9311 0499
Email: email
Business Development of Australian Alpaca Fleece Ltd
During 2005, as part of a fundamental review of AAFL's business model, and with Federal industry funding assistance, the Managing Director visited alpaca fibre processing, manufacturing and wholesale distribution companies in Peru, Italy, China and New Zealand. Two important factors were that the raw fleece prices paid to Australian growers had to fall because world market prices for all natural fibres had dropped, and the Company had to seek broader markets overseas due to seasonal demand limitations in Australia, as well as some manufacturing limitations. And while the elite Italian rare natural fibre processors were transferring their operations to China, the highest quality alpaca products were being made in Peru, drawing on nearly 50 years of experience there in all facets of processing this unique natural fibre.
Accordingly, AAFL adopted a new two-pronged strategy:
- to continue to support and develop existing markets in Australia and New Zealand while also engaging more strategic partners overseas,
- and sending some Australian alpaca fleece to Peru from early 2006 to be manufactured into merchandise to be marketed in Australia, as well as in China and other overseas markets.
The overall strategy thus evolved to seek more sustainable profit margins that could only be achieved by value-adding to alpaca fleece through the manufacture and marketing of high quality alpaca products. Fundamental to this was the registration of the AlpacaMark™ trademark in China, NZ, USA and the UK.
Additional working capital was raised in 2005, 2006 and 2007, and the Chairman's 2007 report to shareholders highlighted growth from Co-op turnover of some $300,000 in 2004 to $1,098,000 in 2006 and a further 153% increase to $2,777,000 in FY 2007. He pointed out the need to find markets for all alpaca fleece types, grades and colours, although the highest demand continued to be for white and light fawn fleece able to be dyed in fashion colours to be competitive with the other 'noble natural fibres', especially cashmere, silk and mohair.
Major Developments in 2008
Links to the world's largest Alpaca Company
During 2008 major new AAFL business direction foundations were laid. In April, the Company acquired the business of
Neilson-IDE™, primarily comprising the importation and distribution of the premium alpaca label,
Kuna™, in Australia and New Zealand. This business is expected to add over one million dollars to AAFL sales. The
acquisition was made for equity in AAFL, and thus Grupo Inca Peru™ became the largest individual
shareholder in AAFL, finally holding 28.7% after shareholder approval at the 2008 AGM and an additional small share purchase.
The acquisition also brought an office in Sydney that now markets AAFL's Australian Alpaca Connection brand of homeware and
fashion products in addition to the Kuna™ brand range.
Representative Office in China
In late 2008 AAFL opened a Representative Office (CRO) in Shenzhen, China, a large manufacturing and distribution city near
Hong Kong. The CRO will work with major Chinese retail stores, as well as developing and managing relationships with other
Asian distributors in Hong Kong, Japan and Korea.
Closer Cooperation with the Australian Alpaca Association Ltd
The AAA is AAFL's second largest shareholder, and over half of all AAA members are also AAFL shareholders, many with smaller
parcels issued by the former Co-op. In May 2008 AAA and AAFL Board members met to set a framework for the continued
co-operation of the two entities in a way that will promote both the breeding and the fleece industries. A Memorandum of
Understanding (MOU) was agreed, including the following:
- "The Boards of both AAA and AAFL share an expectation that sales by AAFL will continue to expand both locally and
internationally, with strong support from Australian growers, and that AAFL will prove to be increasingly profitable
into the future. The Australian Alpaca Mark is symbolic of the joint interest which the two companies share in promoting
increasing international recognition of Australian alpaca. The AAA supports, in principle, the collection by AAFL of the
major part of the national Australian alpaca clip, and they recognise a mutual goal to improve the quality, quantity and
marketability of the Australian alpaca clip."
In addition to agreeing to regular meetings, the MOU agrees to promote to all AAA members the strategic importance of having a stable, viable and established pathway for the disposal of alpaca fleece to underwrite the core value of the alpaca breeding industry. Another undertaking is to review of the practicality of jointly occupying the same premises, achieving economies in overheads, and presenting an integrated face to the public and industry customers, whilst retaining separate administration and governance.
