ONCE viewed by Chinese wool processors, faced with rising costs at home, as the next big wool production centre, Vietnam has emerged in its own right as a key market for Australian Merino wools.
The COVID-19 pandemic may have disrupted plans by some Chinese companies to build new factories in Vietnam, but others have formed production associations with Vietnamese businesses and others have moved production machinery across to Vietnamese partner businesses.
But it is not just Chinese processors who have looked to Vietnam as a source of manufactured wool products.
The Sdwolle Group, a German family-owned company and leading international manufacturer of wool yarn with more than 3200 employees, 13 sales offices and 10 manufacturing plants around the world, established Dalat Worsted Spinning in Lam Dong Province in 2018.
Its Dalat Worsted Spinning factory was the first worsted yarn spinning mill in Vietnam and is one of the most modern in the world.
Designer Textiles International, which started manufacturing Merino wool textiles in New Zealand more than 50 years ago, is another wool processor to set up a manufacturing operation in Vietnam.
Now part of global company Youngone Corporation, Designer Textiles' head office and innovation centre remains in New Zealand, but its manufacturing plant is in Vietnam.
Few Western Australian Merino woolgrowers however, are likely to have heard Vietnam mentioned as a destination for their wools.
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That is because Merino wool from Australia goes to Vietnam via China.
Vietnam's comprehensive and strict environmental laws have made it unlikely early-stage wool processing - scouring and combing - development proposals would be approved there.
Australian Merino wool goes first to China for early-stage processing and then, as wool top, on to Vietnam, to spinners making yarn and to flatbed knitters and circular knitters making fabrics and garments.
The Vietnamese wool products - yarns, fabrics, finished apparel and accessories - made from Australian Merino wool, are exported back to clients in Australia and in countries around the world, including Japan, Korea, Taiwan, United States of America, Canada, France, Italy, Hungary, Germany, Czech Republic and Brazil.
Some Vietnamese manufactured wool products were also exported to Russia before sanctions were imposed over the invasion of Ukraine.
Australian Wool Innovation (AWI) through its The Woolmark Company (TWC) subsidiary, first identified Vietnam as an emerging manufacturing hub for wool textiles in 2012 when the Vietnamese textile industry begun to focus on high quality products and production.
The TWC has since worked with domestic brands to produce their first wool collections made in Vietnam, which have successfully sold locally.
AWI has produced and recently updated a 28-page Wool Sourcing Guide - Vietnam, which provides details of some 50 spinners, knitters, weavers, garment manufacturers and sock makers, to help link Australian brands looking for product or manufacturing capability, to them.
Trudie Friedrich, AWI regional development manager - emerging markets and India, has recently returned from a trip to Vietnam to meet with some of the more than 90 wool supply chain partners AWI collaborates with there.
"It was my first trip back to Vietnam in two years because of COVID and I visited a number of our supply chain partners there," Ms Friedrich said.
"The mood is really very positive there, the people I spoke with are all very positive about the future for manufacturing with wool in Vietnam."
"Most of the people I spoke to said their businesses were back to pre-COVID production numbers and a couple said they are already looking to expand.
"Vietnam used to be an emerging market (for Australian Merino wool), but it has grown beyond that now.
"It is a very good, growing market for our wool.
"There is a large spinning and dying sector and we have a lot of knitters amongst our supply chain partners there."
- TWC's Wool Sourcing Guide -Vietnam is available at woolmark.com
