RI rescues Western Australia wool mills

RI rescues Western Australia wool mills

PERTH (Reuter): An Indonesian company will establish an A$18 million synthetic yarn and rug manufacturing facility in Perth as part of a package aimed at rescuing the troubled Western Australian carpet yarn manufacturer, Albany Woollen Mills, the State Government said yesterday.

The government said yarn and carpet manufacturer Nobel Investments Pty Ltd had agreed to take over the 72-year-old mills and establish a polypropylene yarn manufacturing facility in the Perth suburb of Canning Vale, in return for a A$4 million state government incentive package.

Albany Woollen Mills was put in the hands of an administrator in January after announcing it had lost A$774,000 in the six months to Dec. 31.

The government incentive package included a A$2.8 million interest-free loan over five years, convertible to a grant subject to specified performance criteria, effluent headworks charges up to A$500,000, an interest subsidy up to A$600,000, freight subsidy and stamp duty rebate.

The Canning Vale plant would be built on land sold to the company by the state government, with the land, valued at A$2.8 million, forming part of the security for Nobel's loan.

Western Australian Trade and Regional Development Minister Hendy Cowan said about 100 jobs would be retained at the Albany operation and a further 33 jobs created at Canning Vale.

"The threatened closure of Albany Woollen Mills would have been a severe blow to the town in terms of employment and flow- ons to the local economy," Cowan said in a statement.

"Through the involvement of the Nobel group, and with the support of the government, Albany Woollen Mills will continue to be a major employer."