Woollen mill loses deal with Qantas

A Report in the The Examiner in Launceston says that Launceston’s Waverley Woollen Mills has cut production and faces an uncertain future after the loss of a key contract with Qantas.

Qantas had been the mill’s major customer, with blankets produced for the airline’s first and business classes representing about a quarter of total sales, but the airline has scrapped the deal with immediate effect, and will source cheaper blankets from overseas suppliers.

Waverley managing director Ian Sloan said the news had come as a shock, and the company faced a battle to survive in a highly competitive marketplace.

Crisis talks are being held by the company’s board, and the mill’s 90 staff were briefed by management.

“The Qantas contract takes up approximately 25 per cent of Waverley Mills’ output and will doubtless have implications for the company,” Mr Sloan said.

“I have moved immediately to put the mill on a four-day working week while we consider the future directions of the company.”

The company’s financial position had been steadily strengthening since emerging from administration three years ago, underpinned by the Qantas contract and growing success in export markets.

Mr Sloan said last year had been a successful one for Waverley, with the opening up of new export markets and improving quality control being highlights.

But he couldn’t guarantee that the company could survive the loss of the Qantas deal, and State Government support would be sought in an effort to keep the historic operation running.

“The products we build at Waverley Mills from Australian wool are recognised worldwide as the finest available, and the blankets we made for Qantas were made with the same criteria,” Mr Sloan said.

“Other companies may be able to beat our price, but they’ll never match our quality.”

Waverley Woollen Mills is one of Tasmania’s oldest businesses, having been established in 1874, although falling tariffs and increased competition from cheap imports put the business under pressure in recent times.

A Report by The Mole from The Examiner