Grown in Australia, made in Vietnam

30 July 2012

A new manufacturing market is emerging which promises big things for the promotion of Australian Merino wool.

The Woolmark Company's ‘Out of Vietnam’ project aims to develop a sustainable supply chain in Vietnam and expand its current manufacturing sector.

With Australia currently sending about 80 per cent of its wool to China and becoming increasingly reliant on this country, The Woolmark Company saw the need to develop a new processing and manufacturing market for Australian wool.

And, according to The Woolmark Company's General Manager for Product Development and Commercialisation, Jimmy Jackson, Vietnam ticked all the right boxes.

“We conducted extensive studies into alternative countries, but Vietnam came out number one,” Mr Jackson said.

“Vietnam meets a host of essential criteria, including: its low sovereign risk; it has a large, well-established textile manufacturing industry and infrastructure; a large, skilled workforce; it is already a large and growing exporter of textile products; it has large trade access including a Free Trade Agreement with the USA; and an abundant supply of water.”

The Out of Vietnam project will initially focus on the knitting sector with plans to move to wovens at a later date. The Woolmark Company has already made contact with more than 30 organisations, and after numerous visits to Hanoi and Ho Chi Minh City one key message continued to emerge: The time is right for wool.

“We have received a fantastic response to this project,” Mr Jackson said. “Apart from the 30 partners we also have four new wool spinning plants looking to invest as well as about 20 knitters.”

CEO of CANIFA – one of Vietnam’s leading apparel retailers and knitwear manufacturers – Ms Doan Thi Ngoc is a firm believer there is a bright future in developing a sustainable supply chain for Australian Merino wool in Vietnam.

“It is the right time for wool in the Vietnamese knitting Industry,” Ms Ngoc said.

“For years we have produced knitwear from either acrylic or cotton, but we need to produce more premium added value products, and Australian wool without doubt, is the first choice.

“With the support and assistance of The Woolmark Company’s technical expertise we are confident that we can produce wool knitwear to international standards in terms of design and quality.”

Vietnam has a low-cost, high-skilled workforce and is not afraid to invest in modern machines. And with superb experience working with cotton and man-made fibres the future for setting up a wool manufacturing industry looks promising. It is the world’s second largest exporter to the USA and the third largest to Japan. It is also a top destination for Korean companies for investment in textiles.

The Woolmark Company will replicate the model that was a proven success in the 1980s and 1990s with China when implemented by the International Wool Secretariat. It will also train and teach the staff at the Hanoi University of Technology, the Textile Research Institute and collaborate with the Vietnam Textile and Apparel Association. Industry partners will be taught both theoretical concepts and practical knowledge through in-house trials and the technical aspects of manufacturing Merino wool products.

Already, a healthy relationship has been established between The Woolmark Company and Vinatex – the government arm of the Vietnamese textile industry.

“Because of this established relationship The Woolmark Company is honoured to have been invited to participate in next year’s 40th anniversary celebrations for diplomatic and trade relations between Vietnam and Australia,” Mr Jackson said.

“We are also planning to host to two fashion shows held as part of the celebrations, one in Hanoi and one in Ho Chi Minh City, showcasing a collection of garments all made from Australian Merino wool and illustrating the motto ‘Grown in Australia, Made in Vietnam’.”