Australia will set up a new wool supply chain in Vietnam. The goal is to sell greasy wool to Vietnam’s fledgling wool industry. Australia wants to reduce its heavy reliance on China and create new business opportunities elsewhere in the world. Australia has so far partnered 91 manufacturers, mainly knitters, teaching them to produce quality clothing from Australian wool. Of them, 43 are technically competent, making products from Australian wool and sending most of them into Japan and Korea.

The second stage of the supply chain is working with companies and teaching them how to produce wool yarns from Australian wool for the knitting sector. Small ranges will be launched in different colors, around 20 colors at first, and will be supplied to the local spinning industry.

Vietnam is seen as a good market for Australian merino garments. The country is politically stable, has low labor costs, about one-third that of China. It has skilled textile workers although they use synthetics rather than wool. Vietnam has signed free trade agreements with Japan, Korea, the European Union, and is close to signing the Trans-Pacific Partnership. In addition, Vietnam has emerged as one of the fastest growing exporters of textile products.