One reason cited by AWI director in charge of urban fashion, Kelly McAvoy, is that labour cost in China is high, making wool manufacturers shift their companies to other countries.
AWI product development and commercialisation general manager, Jimmy Jackson, said Vietnam has a large textile industry processing cotton, polyester and acrylic products with a semi-skilled workforce and is quite capable of producing wool products on a large scale.
Labour cost in Vietnam is about US$185-200 a month, far cheaper than that in China, now up to US$800-US$900.
Jackson said another strength is that Vietnam has pre-existing trade routes to Europe and Russia, helping Australian wool easily access other cold climate countries.
AWI director in charge of developing markets, Rajesh Bahl said there is a plan afoot to invest more in wool production and marketing to meet increasing demand from middle class in Europe and the US for high quality warm clothes.