Clarke Yu is on the factory floor, overseeing quilt-making at his busy Melbourne operation.
Some staff put soft woollen inserts into fabric covers, while others card the wool in large machines.
Yu says most of the 60,000 woollen quilts produced each year are exported to China, where in the north-east, winter temperatures fall below -20C,
"China has 1.4 billion people and many of them want warm quilts," Yu, 38, said. "So we export 85 per cent of our quilts there."
Why does China like Australian wool?
Demand for premium Australian wool products has grown steadily in China, which is good news for entrepreneurs like Yu.
"Australian wool is popular because it is a natural fibre," Yu said.
"People see it as organic and healthy. It is one reason Australian wool stands out and why we use Australian wool and manufacture quilts here in Australia."
In total, Australia exports around $2.8 billion dollars' worth of raw wool annually, and 80 per cent of that goes to China.
"Australia produces the best apparel wool in the world," said Gary Turner, chair of the Australian Wool Industries Secretariat (AWIS).
"As our main buyer, China wants our wool mainly for clothing. And we have the biggest volume of it. So, Chinese buyers have to come to Australia to buy wool, to get the volume they require."
The number of sheep shorn each year in Australia has dropped dramatically.
Drop in exports
Even so, last financial year the total value of Australian wool exports fell by 12 per cent and AWIS said overall production is falling.
"Over the past 10 years we've gone from a peak of about 160 million sheep being shorn in Australia down to about 40-50 million sheep," Turner said.
"And that is the lowest level in 100 years."
With 50 years’ experience in the wool industry, mainly in exports, Turner has seen its highs and lows. He cites various reasons for the recent decline.
"Economic conditions around the world have hit hard," he said.
"With the cost-of-living pressures in recent years consumers have started to think more and more about whether they need to buy that new jumper or that new jacket or whether they can do with the one they have for longer.
"Also, there is a casualisation of the workforce, so people are not wearing [woollen] suits as often."
'Speaking Chinese was an advantage'
But Yu said demand for premium Australian products like wool remains strong in China.
Yu grew up in Harbin, a city in China’s north-east, with working-class parents.
Arriving in Australia in 2009 as a business management student, Yu had little hands-on experience. However, he said language skills are key to his export success.
"When I started this business in 2018, I found a big potential market back in China," Yu said.
"And here I learned about good quality Australian wool, but I didn't see manufacturers bringing Australian wool back to China.
"The main reasons are barriers around language and culture. So, that's why I have an advantage speaking Chinese."
Clark Yu as a teenager in China with his mum, Li Sun. Source: Supplied / Clark Yu
In the next financial year, the Australian Wool Production Forecasting Committee estimates shorn wool production will fall just below 280 million kg, which is 12 per cent below the previous year.
According to AWIS, many wool producers are turning to other industries like cropping which brings more consistent returns.
And most of the Australian wool that is exported is raw or unprocessed.
"Australia exports around 80 per cent of that wool to China as greasy wool, and as there is no manufacturing in Australia, they do all the processing or manufacturing there," Turner said.
A trend-defying move
By using wool processed in Australia, Yu is defying the trend, and his business Hermitage Wool Products is growing rapidly.
Seven years since he started, annual turnover is approaching $4 million.
"We have three factories around Australia — in Melbourne, Brisbane and Adelaide," Yu said.
"And we keep innovating, too. We have applied for a patent for 'smart quilts'.
"The concept is to attach chips to the quilts, so to monitor heartbeats or blood pressure while people are sleeping."
While growing this startup has been "hard and lonely at times", Yu is ambitious to do more.
"Our aim in several years’ time is to become the biggest wool quilt manufacturer and exporter in Australia," he said.
"So that's our short-term goal."
This story was produced in collaboration with SBS Chinese.
