AWI seeks slice of Vietnam market

While the fibre only made inroads in the emerging market in 2012, the 2014-15 financial year saw the Vietnamese textile market acquire 800,000 kilograms of Australian wool - predominantly through early stage processing mills in China.

After an unsuccessful dabble in the market more than a decade earlier, the research and develop organisation has spent nearly $1 million annually on supply chain diversification in Bangladesh, Russia, Belorussia and Ukraine, with a major focus on Vietnam.

More than 30 Australian woolgrowers toured Vietnam and Hong Kong this month to witness the growth in the use of wool and to hear about the effectiveness of their levy-funded marketing.

During a tour of one of 40 Vietnam-based factories using wool for the first time this year, AWI Vietnam consultant Tran Van Quyen said it was a realistic goal for Australian wool to penetrate 3pc, or $810 million, of the Vietnamese textiles and garment exports market by 2020.

Biting-off a larger slice of the textile market will be achieved through education, according to Dr Quyen, who is teaching 12 traditionally acrylic spinners how to manufacture wool and wool blended yarns.

He said several of the 12 companies trained in the dyeing, knitting and finishing processes had already started with commercial orders.

Dr Quyen said the next goal was to encourage early stage processing of top making and scouring in Vietnam's garment-focused industry.

He said this would act as an alternative to Australia's heavy reliance on China as the major buyer of greasy wool.

This was behind AWI's first entrance into the Vietnamese market in the early 2000s following a free trade agreement with the United States, however political challenges stymied this attempt.

Consultant Gary Robinson said in 2014, in an effort to increase competition with China for Australian wool, AWI reignited the market with Russia and had another bid at generating a new market in Vietnam.

Last year, Dr Robinson facilitated a trial with Nasilkmex, near Hanoi, to use wool/acrylic blends in sweaters.

Despite only "fair success", Nasilkmex adopted 90pc of AWI's recommendations and last week began the commercial processing of wool which was witness by Australian woolgrowers.

"There are a range of things you encounter when you do these trials which aren't just wool or market related - they're politically related, culturally related and quality related," Dr Robinson said.

"They'll never be the powerhouse China has been because of their general capacity but there is no reason they can't be proportionally as good, and that doesn't say we won't see significant growth and importance to the Australian wool clip."

Annabelle Beale travelled to Vietnam as a guest of Elders.