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Smarter Staff
Smarter Writer

This article has been written by the Smarter Business™ Staff Writers

Smarter Staff
Smarter Writer

This article has been written by the Smarter Business™ Staff Writers

Highlights
  • In 2011, a group of farmers in Whitton, NSW launched the cotton ginning business, Southern Cotton
  • In June 2012, the Riverina cotton crop was double that of the previous year

  • Southern Cotton won the 2015 Telstra Australian Regional Business Award and is now attracting attention from the US
  • The $26 million business now employs 11 people, 40-plus seasonal workers, and processes about 180,000 bales a year

Riverina cotton farmers are doing it for themselves. By investing in an innovative paddock-to-bale processing system, they have increased cotton yields and farm incomes.

In 2011, a group of farmers in the NSW Riverina town of Whitton, tired of paying hefty transport costs and facing closed doors from financiers, decided to pool their resources and design and build their own cotton gin, risking their own businesses to secure the finance.

The farmers, Tim and Roger Commins, Gerard and John Toscan, Scott Hogan and Larry Walsh were travelling to a gin 400km away to process their cotton, costing them time and money. The group wanted to promote cotton as a profitable alternative crop in the area, and to develop better ways to track the cotton and create yield reports.

The plan was not without its risks. The gin cost $25 million to build, there were worries about how drought and the government’s Murray-Darling Basin Plan would affect the availability of water, and the area was not traditionally a cotton-growing region. 

Southern Cotton manager working in a field.

Taking the lead

When the Southern Cotton team appointed experienced agribusiness manager Kate O’Callaghan as general manager in 2011 she was impressed with the directors. “They were among the most innovative thinkers I have ever encountered,” she says.

For starters, they spotted data possibly being wasted. Each package of cotton collected from the fields – known as a ‘wrap’ – contains a radio-frequency identity tag number. But it was common practice to ignore the number and replace it with one associated with the truck delivering the crop.

The directors spotted that they were potentially losing valuable information on when and where higher or lower quality wraps were collected, which could point to the best growing conditions.

During the gin’s build, the directors were hands-on researching and improving technology. The gin included the first automatic bagging machine in Australia and could process both round bales and conventional cotton modules.

Almost every component of the gin can be tracked and managed remotely, either by Southern Cotton or its equipment suppliers. The data gives the Southern Cotton team visibility across a wide variety of factors, including the moisture content in the raw cotton.

Using a tablet or smartphone, they can log on remotely and provide information on any particular bale.

There is also an app in development to provide growers with data about the progression of their crop. “We’re staying ahead by giving people that instant access,” says Kate.

Winning ways

Management: Southern Cotton benefits from having a flatter management structure. “You don’t want them [employees] to have that ‘here-comes-the-boss’ attitude. You want a place where people are happy to work hard and work together.” – Kate O’Callaghan

Marketing: There’s a popular perception that cotton farmers are reckless water users robbing towns of precious water resources. To counter this, Southern Cotton has actively sought to educate consumers by telling their story to credible media outlets and other influencers. Kate O’Callaghan believes other companies facing similar challenges should consider a similar approach.

Finance: “Never give up. There was a number of times we could have said ‘We just can’t do this, it is way too hard.’ If you passionately believe in your business, just keep going.” – Kate O’Callaghan

Onwards and upwards

Southern Cotton won the 2015 Telstra Australian Regional Business Award and the gin is now processing an average 180,000 bales of cotton a year from more than 40 growers. In the past four years, it has processed cotton for 700,000 bales from 100 different growers. 

As well as cotton ginning, the business also markets cotton seed for livestock feed and oil extraction, providing another income stream for cotton farmers.

There is certainly no sign of things slowing down at Southern Cotton. They are successfully growing cotton further south than anyone expected, and plan to sow 50,000 hectares for the 2016 season. The company’s cutting-edge crop management technology is also attracting attention from major US agriculture brands.

Southern Cotton’s strategy is simple but powerful: to gin cotton at the highest quality, and to secure the best price for the grower.  

Judges' comments

The judges believed Southern Cotton has developed a robust business which delivers enduring benefits to their local regional community. From the outset, Southern Cotton established industry-leading processes and practices. The judges applauded the business’s investment in technology and innovation, and the way it has upheld the interests of its growers. The wider industry has also benefited from Southern Cotton’s community education on the environmental impact of cotton growing, and its development and management of markets.

Having visibility over operations helps keep Southern Cotton competitive.

Here's how Lisa Messenger maintains transparancy across her business.

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