LESOTHO’S economy is set for a major economic boost with the ongoing construction of a 10 000 square metre wool centre in Thaba-Bosiu.
This is the view of the project’s main investor and Managing Director, Stone Shi, who also says it will enable local wool and mohair farmers to export directly to factories in Britain and other international markets without the need for middlemen who charge exorbitant commissions.
Mr Shi, who is of Chinese descent, has so far invested M37 million in the Lesotho Wool Centre (LWC) that was launched earlier this month.
The project is a joint venture between Mr Shi’s Maseru Dawning and Lesotho National Wool and Mohair Growers Association (LNWMGA) which contributed M4 million.
LNWMGA is said to hold a 75 percent stake in the LWC, while Maseru Dawning has the rest. The joint venture was set up in April 2016, with construction of the centre commencing in April this year.
With a storage capacity of 8 000 tonnes of fabric, once fully operational, he said the LWC is the largest wool centre in Africa. Currently, the centre employs 15 people, with the number expected to rise to 55 upon full operation.
Mr Shi came on board which had been supported by the International Fund for Agricultural Development (IFAD) through a 2014project proposal titled Wool and Mohair Promotion Project.
The project proposal included a value chain study which identified the poor standard of wool and mohair handling among the factors that needed to be addressed in order increase overall productivity.
Mr Shi recently told Business Journal that the centre would enable local farmers to export directly to markets without intermediaries.
In turn, this would increase the farmers’ financial returns thereby reducing poverty and increasing employment.
In years past, the farmers depended on South African wool and mohair brokers who charged hefty commissions.
He indicated that the direct access to the markets would also reduce the time it took for farmers to be paid when a sale has been concluded.
Farmers used to wait for up to eight months before receiving payment, but Mr Shi said that would be reduced to a maximum of eight weeks.
“The centre also ensures that the fabric is traded in a secure manner to ensure that farmers’ interests are well protected,” Mr Shi explained, adding that before the establishment of the wool centre, there was no guarantee that farmers would be paid.
“We are going to use an auction system whereby different buyers from around the world will bid for the fabric over the internet. We will then choose the highest bidder and arrange for a payment before the fabric can be shipped.”
Through that approach, Mr Shi said, the farmers would be able to fetch good prices for their fabric. The LWC transports and handles the fabric from woolsheds around the country for storage and sorting.
The centre also has a shipping department for international transportation and charges a commission to the farmers.
“I can guarantee that this project is going to increase the level of revenue received by farmers by at least 20 percent per annum, which can be translated into M50 million,” he said.
In the 2015/16 financial year, the revenue generated from the sector was M330 million.
The improvement in financial returns, he said would allow farmers to re-invest into their herds thereby increasing production.
Mr Shi said he would use his 17 years experience in the sector to assist farmers in improving the standard of wool and mohair handling – shearing, classing and presentation.
“I am not just here to make wealth for myself. I want to help the farmers gain more out their fabric and stop being ripped off like what has been happening in the past,” he said.
“There is certainly room for improving the production capacity in the country as this would create many jobs. When we have more fabric, it will also be easier for us to establish a scouring plant locally in future.
“Lesotho has one of the best qualities of merino fabric, bettered by only Australia and New Zealand, and we should let the world know about it.”
Another plan in the pipeline, he said, is the establishment of a veterinary hospital and a factory that manufactures containers for fabric bales.
Agriculture and Food Security Minister Mahala Molapo has commended the project, which he said was essential to the country’s development through creating new jobs.