Australia's wool industry is struggling to cope with low production levels and rising costs. Greg Navarro has more on how local produces are looking to the Chinese market to help drive demand.

"We want to focus on one thing only to make it the best."

When Chinese-born Clark Yu first came to Australia in 2009, "This is one hundred percent Australian bred, Australian grown and Australian process sheep wool," the idea that he would carve out a successful career in high-end wool products, probably seemed ridiculous.

"This has been cleaned and processed and you can smell that. It doesn't smell that much at all."

CLARK YU, Director, Hermitage Wool Products "The only thing I knew about Australian wool is there are lots of sheep in Australia and New Zealand. So that's the actual filling of the quilts."

The 39-year old business student immersed himself in Australia's wool industry and saw an opportunity.

CLARK YU, Director, Hermitage Wool Products "I learned that they have a multi-billion dollar industry in China every year for bedding. And quilts are one of the things that costs a lot."

Yu created Hermitage Wool Products, which ships most of the high end wool bedding products it makes to China.

GREG NAVARRO, Melbourne, Australia "When this company started 6 years ago this was the only warehouse. Today there are three spread across three states. The company continues to grow and, more importantly, it's doing so at a time when Australia's wool industry is struggling."

Production in the industry is at a 100-year low. High costs are prompting a rising number of producers to leave the industry.

JOHN ROBERTS, Chief Executive Officer, Australian Wool Innovation "Right now the cost of shearing and the labour involved in shearing is causing some real problems and making a lot of primary producers look at how better they can use their land."

Around 85% of the wool Australia produces is exported to China.

ROBERT HERRMANN, Executive Director, National Council of Wool Selling Brokers of Australia "China was able to provide this processing capacity at the best cost at the time and then supply the world with the amount of wool products that it needed."

Now, an increasing amount of Australian wool is staying in China where it's used in domestic garment markets. And that's presenting a new opportunity for Australian producers. Ad campaigns such as this are designed to highlight the benefits of wearing wool and increase demand.

JOHN ROBERTS, Chief Executive Officer, Australian Wool Innovation "We are trying to change people's perceptions about Australian wool and remove that old itchy, scratchy kind of conservative image and make people think of it as a contemporary fibre."

"We make around 250 quits a day."

Clark Yu is also trying to change people's perceptions about wool.

CLARK YU, Director, Hermitage Wool Products "It's all natural, organic, it breathes well to help you sleep and they improve the quality of your sleep  why not?"

One quilt at a time. Greg Navarro, CGTN, Melbourne.