Australian Wool Innovation visits China for the first time since 2019 with ‘massive changes’ laid bare

Mark McGowan wasn’t the only Australian leader wheeling and dealing in China this month, with Australian Wool Innovation chief executive John Roberts making the levy-funded group’s first trip to the country in four years. The AWI boss — who took the reins in October 2021 — said there was an underlying confidence in China and a quiet determination to expand wool processing operations, despite the nation’s wool price sitting at just 1289c/kg last week. He said the China Wool Textile Association had made it clear that Chinese consumers wanted to wear wool, with processors expansion projects being carried out on the back of a “massive shift in consumer demand”. “This is an encouraging sign for Australian wool producers,” Mr Roberts said. “The 50 per cent (of wool from Australia) that now stays in China, is going to increase each year on year. “Chinese consumers are buying local brands and local designers, which is a massive shift to where we were 10 to 15 years ago.” China is the first destination for 80 per cent of raw wool exports from Australia. Mr Roberts met with industry groups including including the China Wool Textile Association, the Nanjing Wool Market and senior executives who process wool in Shanghai, Zhangjiagang, Tongxiang, Nanjing and Beijing. He said said he was impressed by the wool processing expansion taking place. “Every plant I went to has been updating and I’ve never seen so many solar panels,” Mr Roberts said. “Overall, the expansion in plant capacity is incredible. “A few years ago only two or three top making plants had the capacity to process over 10 million kilograms. “That number has increased significantly.” Mr Roberts said another main message he took away from the trip was the growing consumer and industry attitude towards wool’s sustainability, with a “massive shift towards traceability”, after COVID-19 propelled online sales forward. “The concept of sustainability in China has escalated at a rate I hadn’t quite expected,” Mr Roberts said. “They understand that the Chinese consumer wants a naturally-sourced fibre. “They’re getting a similar message from their overseas customers too, particularly with the rising spending power of Gen. Z, and they are emphasizing the natural biodegradable qualities of wool because it is a strong selling point.” Mr Roberts’ trip China co-incided with Mr McGowan’s recent five-day trade mission, which was also his first in four years and an international trip hoped to improve trade relationships and promote WA businesses and produce. He said it was important to go to China to acknowledge and thank its processing sector for its support for Australian wool growers and the domestic trade more broadly - “a message that was very much appreciated”. He also visited two major processing hubs in the Yangtze Delta, Zhangjiagang and Tongxiang near Shanghai where the vast majority of Australian wool clip is first processed. “The meetings held with processors accounted for more than 70 per cent of that buying power, the biggest top makers in China and therefore in the world - all of whom are reporting expansion of their processing facilities, which is really encouraging,” Mr Roberts said. “That optimism is also reflected in many of the second-tier processors who are also looking to expand or have already done so during COVID.” Mr Roberts also visited India in December for trade talks and said both India and China were important for Australian wool sales. “Some of the key mills in India are expanding, but that said, they’ve still got a long way to go from 5 per cent of our wool clip which India currently take to the 82 per cent that China buy,” he said. AWI has locally staffed offices in Shanghai, Beijing and Hong Kong.