Karoo mohair R2.4 billion every year and growing – frack that?


‘It makes R2.4bn gross income a year, which is more than the automotive industry in the Eastern Cape.’

Tons of potential for these tresses

BY BRENDAN PEACOCK, NOVEMBER 11 2013, 13:20
Colin Cowie.  Picture: THE HERALD

Colin Cowie. Picture: THE HERALD

THE amazement at the presentation by internationally renowned designer Colin Cowie illustrated the chasms between each link in the mohair chain that need to be bridged.

The second International Mohair Summit, held in Jansenville in the Eastern Cape last week, brought together local and international farmers, buyers and manufacturers.

Mr Cowie’s talk demonstrated the myriad possible uses of mohair in the world’s luxury-goods market and offered a thread of big-picture ideas to farmers.

This was to be a feature of the summit: at the moment, once the mohair has been cut from the goats, processed and sold to a buyer, the farmer ceases to play a role in the dynamics that determine the auction price for his goods.

What the grower needs, then, is for somebody to drive demand for the product on his behalf. And this is where the picture becomes complex.

Nearly 60% of the world’s processed mohair comes from South Africa. Although the mohair industry is just a tiny fraction of the world’s fibre market, it makes R2.4bn gross income a year, which is more than the automotive industry in the Eastern Cape.

Yet, according to Leon Coetzee, general manager at the Eastern Cape department of rural development and agrarian reform, there is a retail mark-up of 100% on mohair products — and farmers are getting just 7% of that value.

Mr Cowie’s depiction of potential uses for mohair — including drapery, wallpaper and automotive interiors — demonstrated ways that the international market could be grown.

But trying to increase the farmer’s share comes amid competition from producers of other natural fibres, such as wool and cashmere. Thanks to this competition, the higher one moves up the production chain, the less manufacturers have to worry that the price of mohair might rise.

A price that rises too high, too fast might jeopardise the mohair industry. But farmers have no control over price or the use of the fabric — that is down to the global market in luxury goods.

Right now, mohair growers are in a good position: after two lacklustre decades, prices are at an all-time high and demand is set to remain strong.

Gross margins in angora goats are much higher than for other types of goats -typically R262/ha. That is nearly twice the margin for other breeds.

Angoras are also relatively light on resources, although sustainability is an issue because the Karoo is slowly being denuded of grazing through the temptation to overload the land.

The record prices recently fetched at auction — as high as R600/kg with an average price closer to R150/kg — have meant that land values in the region where the delicate angora goats thrive have risen and farmers are now consolidating.

Economies of scale mean that the gap between successful commercial farmers and emerging farmers, placed on communal land by government intervention, is widening.

Deon Saayman, general manager of Mohair South Africa, said the organisation represented the industry from farmworkers to processors — and the Mohair Trust was training emerging farmers to become commercial.

“We train them to improve their flock, in shearing and classing of the hair, which is where you get true value for your fibre. We now have just over 100 emerging producers, but the subsidies are a challenge. The Department of Rural Development acquires farms and we try to get land for the farmers we’ve trained.”

The trust holds the assets of the industry, which is generated from investment income. Its main task, because it cannot subsidise individuals, is to promote mohair worldwide to benefit all players.

“The offspring kids from the training programme go with the trained farmers, although that’s still not enough to become commercial, and it’s almost impossible to rent land. We have to engage closer with the government: they place individuals on farms and those farmers will fail if they are not mentored.”

Mr Saayman said although mohair farming even on a small scale could be profitable and good for cash flow — thanks to shearing twice a year — it is labour-intensive and requires a high degree of management.

Opportunity exists but it must be grasped. The Eastern Cape produces 2.3-million kilograms of mohair annually, but competitors in Argentina, Turkey and Texas are struggling.

“Many wool and boer goat farmers also farm angora -it’s a complementary stock,” said Mr Saayman. “In some years I think we’ll see corporate investment in angora operations. It will probably remain the most profitable livestock farming operation.”

Japan used to be mohair’s largest consumer market, but Mr Saayman said Japanese demand had fallen away. Instead, Mohair South Africa intends targeting China, the US and Europe, as well as South Africa.

“Off a low base, the local market has lots of potential. The Chinese market is undertapped. They’re the second-biggest importer, but their end-user market is not as big. They’re predominantly spinners.

“Italy remains the biggest end-user market. The products are available, but we need to reach decision-makers -people of influence. It’s a difficult balance between opening up new markets and being able to supply enough mohair.”

World fibre production is increasing steadily, but mohair remains a tiny component -the most growth is in synthetic fibres.

In natural fibres, cotton still dominates and mohair-product manufacturers are trying to develop products that are useable year-round.

Jian-Ming Zhang, the founder of Hanscent China, which imports and exports textiles, pointed out the massive potential in the Chinese domestic market, where mohair use is restricted to the region around Shanghai. Echoing Cowie’s sentiments, Jian-Ming said China had processed 686,935kg of mohair in 2012 — but from January to June this year, 511,734kg had already been through the mills.

“Young designers are driving demand, along with silk and cashmere. There is a focus on luxury,” he said.

Fire-retardant, fragrant fleece

MOHAIR comes from Angora goats, which have been in South Africa since 1938.

The goats are shorn twice a year. Once the fleece has been clipped off the goat, it is sorted into quality types — called classing — and then scoured to remove dirt and oils.

From there, it is further refined to eliminate other matter before it is combed to produce the soft lengths of fibre that make a top.

These tops can be spun into yarns of various thickness and yarn counts. It is then dyed and knitted or woven for various applications from fashion garments to blankets.

Mohair is virtually impossible to set alight and — in common with other natural fibres — does not have a strong odour and does not have to be washed often. It also outlasts synthetic fibres.

• This article was first published in Sunday Times: Business Times

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