Shortage of labour, scarce premises, high cost, and high environmental protection standards have always been challenges for textile and garment businesses in big cities. However, relocation or new construction of textile and garment factories in other localities in the accordance to the planning to 2020 proposed by the Vietnam Textile and Garment Group has faced greater challenges. It is likely that the textile and garment industry will face continued difficulties.
Unequal distribution
Mr Le Tien Truong, Permanent Deputy General Director of Vietnam Textile and Garment Group (Vinatex) said: Looking at the current situation of the textile and garment industry, it is clear that there is unequal distribution among provinces and regions. In the North, textile and garment businesses account for 30 per cent of all textile and garment industry, of which the concentrations in Hanoi is up to 12 per cent. The businesses in the South account for 62 per cent, of which Ho Chi Minh City makes up an overwhelming 50.9 per cent. Thus, the Central region accounts for only eight per cent of the textile and garment businesses in the country.
In big cities like Hanoi and Ho Chi Minh City, the high density of the textile and garment businesses will lead to strong competition between textile and garment businesses and other industries. This is not to mention that textile and garment businesses have to compete with one another on orders, labourers and salary. Moreover, Mr Truong analysed that production cost is higher, land funds are limited, and especially the requirement to comply with environmental laws more severe.
Mr Truong pointed out that textile and garment businesses face labour shortage because industry growth is too fast, without good plans, over the recent period. Many textile and garment businesses were spontaneously founded, which made the demand for labour increase while the number of employees trained from the localities could not meet businesses’ needs.
Salary is another reason why employees are indifferent to textile and garment businesses. With the average income level of approximately VND2.5 million per month, employees would rather switch back to their localities than work in businesses in the city due to higher expenditure. Mr Truong said for these reasons, it is essential to invest in local factories.
Making new plan
According to the draft plan of textile investing-orientation to 2020 made by the Vietnam Textile and Garment Group, in the coming time, textile and garment businesses will be invested and moved to more appropriate localities, and factories will not be allowed to concentrate in urban areas as present.
In 2011-2020, Vinatex will invest in building 31 fibre factories (capacity of 7,000 tonnes per year each factory), 21 dying textile factories and 164 garment factories, with total expense of over US$2 billion.
Mr Truong asserted after having surveyed the provinces in the country, based on factors such as advantages of infrastructure, per capita income, traditional occupations, labour level, land conditions, and culture, the textile and garment industry has selected five areas for development, including provinces such as Phu Tho, Tuyen Quang, Thanh Hoa, and Nghe An; the Central Coast provinces of Tien Giang and Dong Thap, and Tay Ninh.
Raw material areas are planned in Dak Lak, Dak Nong, Binh Thuan, Ninh Thuan, Dien Bien, and Son La.
Back to provinces: Is it better?
The shift of investment to build infrastructure for the textile and garment industry in the provinces brings many benefits immediately to the economy, like removing difficulties in labour and premises for development, and contributing significantly to create jobs, and improvement in standard of living for local people. This movement will help to reduce pressures on labour migration and the pressures of traffic and environment for big cities.
However, problems from the lack of planning or ineffective planning which occurred in industrial parks may recur for the textile and garment industry if this planning is not synchronized, or does not forming linking chains from raw materials and production to supply, or does not meet the conditions of water and electricity, and post-production processing. Mr Truong himself said that without stable and sustainable planning, it is possible that after investing for a short time from 5 to 10 years, the textile and garment businesses will have to keep relocating. And don’t forget that the high costs for relocation is not less than the cost of new construction. That relocation makes businesses delay production is also a limitation for the textile and garment industry.
Although there is a desire to build new factories in the central region, Mr Truong still feels worried because the cost of shipping a container to and from Da Nang port is twice as high as from ports in Ho Chi Minh City, despite closer distance. This is a limitation for the Central region to attract investment. It should associate the training of qualified employees and being active in raw material resources with the relocation of factories back to the provinces.
Huong Ly
Vietnamese
