There’s hopes for more wool to go to a new player in processing

Moves to diversify wool processing away from its reliance on China has put another market on Australia’s radar.

Australia is trying to find extra places to process wool, and Vietnam is emerging as a player.

The wool industry is cautiously optimistic that Vietnam could offer a means of lessening Australia’s dependence on China for wool sales.

Wool Producers Australia has just signed a memorandum of understanding with the Cat Tuong Group, a real estate development company in northern Vietnam which focuses on attracting textile processing.

WPA president Steve Harrison said Vietnam already had a worsted wool spinning capacity of around 20,000 metric tonnes, about 10 per cent of all the wool that Australia grew.

“With Australia’s extensive wool production and Vietnam’s expanding wool spinning operation we have a common interest in establishing direct trade of Australian wool to Vietnam,” Mr Harrison said.

WPA has worked with the Australian Chamber of Commerce in Vietnam’s AusHub project to explore opportunities for early-stage processing of Australian wool in Vietnam including the appointment of a dedicated wool industry staff member

Kelvin Le has been acting as the Australian wool industry representative in Vietnam since April last year and WPA has just extended the funding for the role for another 12 months.

Mr Le is based in Ho Chi Minh and has been employed to further the work being done to diversify the markets away from China.

Mr Le said Vietnam was an emerging hub for textile production in south-east Asia.

”It is considered a potential key partner for trade diversification for Australian wool,” Mr Le said.

“The signing of the MOU demonstrates that Aurora IP (which is being developed by Cat Tuong Group) is an ideal location for developing an early-stage processing facilities in Vietnam.

“In addition, once established it will strengthen Australian wool demand in overseas locations, underpinning the existing wool supply chain as well as mitigate the trade risks through market access diversification.”

China buys about 80-90 per cent of Australia’s wool clip each year.

Mr Le said his role as an ambassador for Australian wool went further than trying to open up processing opportunities.

“I will keep spreading customer’s awareness of wool use is that Merino wool apparel is the perfect choice for summer in Vietnam – a tropical country,” he said.

“So far, the Vietnamese perception is wool is just used for winter.”

Mr Lee said wool demand was increasing each year in Vietnam.

“I am very aware that the large number of international fashion brands would source wool products from Vietnam because they have required a transparent supply chain,” he said.