FDI firms in VN’s textile and garment industry expand operations
17:26 | 19/07/2019

VGP - An industry insider forecasts the local textile and garment industry will maintain high growth potential until 2035 with an estimated export turnover of about US$200 billion.

FDI firms in VN’s textile and garment industry expand operations

Deputy Minister for Industry and Trade Do Thang Hai said trade and industry achieved remarkable results during the year, making a positive contribution to the national economy.

Viet Nam is the world’s third largest clothing exporter and has benefited as producers and buyers diversify their supply chains, helped by its low labor costs and industry focus on specialization, modernization, and increasing value addition.

The country’s participation in the Comprehensive Partnership and Trans-Pacific Partnership Agreement (CPTPP) and the upcoming EU-Viet Nam Free Trade Agreement (EVFTA) have prompted foreign producers to expand in the country’s textile and garment industry. 

American developer of spider silk-based yarn KraigBiocraft Laboratories Inc has also chosen Viet Nam to scale up its spider silk commercialization efforts. The group is working with agricultural co-operatives in QuangNam Province to set up a center for research and development of silk as well as grow mulberry to support spider silk.

In addition, Korean giant Hyosung Corporation is in the process of expansion in Viet Nam. According to managing director of Hyosung Vietnam Company Limited, Yoo Sun Hyung, the company has invested some US$1.5 billion in Dong Nai province, but is still planning to expand its fiber manufacturing projects.

Another Korean textile producer - Hi Knit Company Limited – has been recently licensed a project to produce textiles and nonwoven fabric for export and domestic foreign-invested companies in Dong Nai Province.

German-based Amann Group, which is among the world’s top three leading producers of high-quality sewing and embroidery thread, is expanding its network to Viet Nam with a new factory being constructed in the central province of Quang Nam.

At the new production site, the group will produce around 2,300 tons of sewing thread per year, mainly for the manufacture of apparel and shoes. The first phase of the project is scheduled to commence in late July next year.

The domino effect created by foreign expansion in the textile and garment sector has also led to an increase in the number of foreign suppliers of machinery and equipment for the industry. ILLIES Viet Nam, a member of German C. ILLIES & Co and a leading distributor of industrial textiles machinery and equipment, for example, also expanded its portfolio in the spinning sector.

It now provides machines and spare parts for short-staple yarn-spinning systems for the Rieter Group and the local textile market.

In the first quarter of 2019, ILLIES will also open a repair center for mechanical and electrical parts of Rietermachines. 

High export growth

The Viet Nam Textile and Apparel Association said free trade agreements, especially the CPTPP and the EVFTA, are a big motivation to lure foreign investment in Viet Nam’s textile and garment industry.

Thanks to the deal, instead of focusing only on Chinese textile and garment products as previously, importers from Canada, Australia and New Zealand are now interested in Vietnamese products. Many of them have come to the country to seek business opportunities and some orders have been signed so far, they said.

In particular, they said, the CPTPP, which will be effective next year, will offer Viet Nam a big opportunity to increase textile and garment exports to the bloc’s markets, which is forecast to have a growth rate of 2-3% next years and have a total import value of up to US$40 billion per year.

With the rising demands, they forecast the local textile and garment industry will maintain high growth potential until 2035 with an estimated export turnover of about US$200 billion.

By Vien Nhu

  Reader opinion
 
Turn off Vietnamese typing Automatic typing Telex VNI VIQR  
Fullname Email address  
  Title
 
  Content