ANDREW MOLE
FOR a guy who wasn’t even interested in looking at Karadoc Winery when it came on the market – its sudden sale by Treasury Wine Estates (TWE) sending seismic shockwaves through the Sunraysia – Mark Dyson still scratches his head when he thinks about what happened next.
Mark recalls it was brought to his attention in April, and his “initial glance” did nothing to alter his indifference.
Even when contacts within the wine industry urged him to have another look, and he did some initial numbers, he stuck to his guns – he didn’t do wine.
Funny thing though; for a man steeped in the wool industry he has also been able to always see an opportunity and concedes he might have been just a little asleep at the wheel with Karadoc.
Flashback to the late 1980s and early 1990s, with the Australian wool industry on its knees, and in January 1991, Mr Dyson decided to launch Quality Wool, a new broking business in an already very crowded market.
A week later the Australian wool reserve price scheme – the price floor scheme for the industry which had been running for 30 years – collapsed.
The price of wool collapsed with it – from 700c/kg it fell almost overnight to 435c/kg. And there were a staggering 4.7 million bales of unsold wool stockpiled around the country as a storm cloud gathered over the market and further depressed the industry.
“The wool industry needed an urgent reset, really urgent,” Mr Dyson said.
“At that time there was a wool broker and/or a wool store on just about every street corner across regional and rural Australia.
“And they were all going broke at breakneck speed.”
So his Quality Wool did the only thing he thought it could, when everyone started selling to get out, he started buying to get in. Starting with a major wool store complex in Adelaide.
Yes, he was a wool broker, but Mr Dyson also saw another opportunity with the store.
“The whole place had been built ages ago and it wasn’t just full of wool, it was full of this fantastic, beautifully aged, lanolin-nourished wood,” he said.
The fledgling wool broker was in the timber business and almost immediately doubled the size of that business by having the massive timber beams and floors sawn in half, giving him twice as much wood to sell.
And sell it he did.
The other major asset with the sprawling wool stores was the very land on which they stood.
So the wool broker turned timber salvage and sales specialist would add land development to his portfolio. Right now he is managing a major project in Albany, in southwest Western Australia, embracing residential, tourism and an eight-storey hotel – on an old wool store site.
Which brings us back to Karadoc circa 2024.
“In February 1991 when the reserve price scheme was suspended that AWC wool stockpile was approaching a billion kilograms and being whacked an incredible $3 million per day (more than $1 billion per year) in storage costs and interest,” Mr Dyson said.
“The Australian Wool Realisation Commission (AWRC) was formed in 1991 to take control of the wool stockpile from AWC, and to liquidate it.
“That took it another decade before it was able to sell the last of the stockpile, and AWRC was then dissolved in 2002.
“I am sure in many ways this kind of setback resonates with the wine industry right now, especially the red wine industry, and pure grape growers, like the woolgrowers, are the ones paying the price.
“So now the wine industry needs a reset.”
That’s when good friends Mr Dyson had made in the wine industry – many of them buyers of his recycled wood – finally got him to have a reset of his own and how he viewed Karadoc.
“When you looked at it, Karadoc had good potential as a hub in the storage and logistics business, and that I do understand,” Mr Dyson said.
“It is already an established wine and glass storage business on pallets and in vats and it became clear, here is an opportunity to turn it into a model similar to what we all went through with wool in the ’90s.
“Wine will have to come back from a glut, just as wool did, and change the way it is done.
“I have met a lot of people in the wine industry and while there’s no timber in Karadoc it is still the same principle, except this time we will be selling space and logistical management.
“The property is on a major transport crossroads going just about every direction of the compass, which is an added bonus.
“Karadoc – now the Karadoc Logistics Hub – is a high-volume storage facility, which enables us to support smaller operations and assist their next vintage,” Mr Dyson said.
“If their cost is A, and we can offer them B using economies of scale, perhaps this could really help their business.
“With 100 million litres of storage at Karadoc, it is the fourth largest in the Southern Hemisphere, so it offers good economies of scale.
“TWE recognises that, for the time being it is also a customer.”
Following the acquisition, Mr Dyson said he had “been amazed and grateful” for the changes in attitude.
“Once people realised we are not here to be a competitor, the response has been encouraging,” he said.
“I’m not familiar to many, but with a vintage coming it would be great to talk with everyone.
“I’m not in the wine business, I’m in logistics (and wool, and timber, and land, and tourism, and feedlots, and grazing, with 110 people on the team).
“Industries can go through these cycles every 30 years or so, and it would be good to work together to start doing something about wine’s challenges right now.”
***BREAKOUT PANEL***
HOW KARADOC LOGISTICS HUB WILL WORK
KARADOC Logistics Hub will be operated by Mark Dyson and business partner Troy Harrington.
With former owner TWE continuing at the property as a key partner with the new landlord, utilising the site’s bulk wine storage, warehousing and logistics operations.
The site adds to Mr Dyson’s existing warehousing operations and broader property portfolio under the wider Quality Wool business, in agriculture and in Western Australia.
“The winery property is located on a strategic logistics route, and we plan to use the iconic, yet underutilised state of the art facility there to its full potential into the future to support the growing industry throughout the region,” Mr Dyson said.
In a win-win for the business and the region, KLH is also retaining key, long-standing staff at the property as part of its acquisition.
Quality Wool has become Australia’s largest family wool broker operating its head office and receival centre in Adelaide along with 12 regional sites under full company ownership across South Australia, Victoria and NSW, equipped with AWTA – accredited testing facilities.
