More and more international garment and textile groups are making inroads into Vietnam, which they see as a promising land for the development of this industry with low-cost and skilled labor, said the Vietnam Textile and Apparel Association (Vitas).
Malaysia’s Pamatex Berhad Group has been granted a license by the Ministry of Planning and Investment to pour a huge investment of US$100 million into Chu Lai Open Economic Zone in Quang Nam province in the central region.
Daewon Corporation is now building a US$8-million garment factory with export-oriented products in Hoa Khanh Industrial Park, its third project in Vietnam after a garment factory in Vinh Loc Industrial Park (IP) in Ho Chi Minh City and a textile one in Nhon Trach IP in southern Dong Nai.
Notably, Taiwanese-base Formosa Group, which has injected over $500 million into Nhon Trach IP in Dong Nai province, also plans to expand its operations in the locality with an additional $400 million investment.
In related news, Turkey, the world’s fourth largest exporter of ready-made garments, is eyeing Vietnam as a potential market, said Turkish-Vietnamese Business Council chairman Muzaffer Arslan at the third session of the Vietnam-Turkey Joint Economic Commission held recently in Hanoi.
Ibrahim Ozsoy, managing director of Oasis Garment which in 2001 became the first Turkish textile business to be established in Vietnam, believes there is great potential for cooperation between Vietnam and Turkey in the garment and textile sector. Ozsoy said he plans to expand the business after Vietnam’s WTO entry.
Malkan Makina representative Multu Malkan said the company, one of Europe’s leading manufacturers of ironing and fishing equipment, is considering establishing a factory in Vietnam to pre-empt the expected demand of the garment and textile industry.
According to Vinatex’s export officer Nguyen Thanh Tung, both challenges and opportunities are waiting for Vietnam’s garment and textile industry before the global integration.
He added that the sector was facing with many difficulties due to a lack of marketable brand names and design capability and particularly almost every company in the local industry has been working as a sub-contractor for foreign producers (accounting for 70-80 per cent of total export revenue). Also it still has to import 80 per cent of input materials as its undeveloped supporting industries.
The equalization of fully state owned textile-garment companies, which is slated to complete in 2007, is considered one of key solutions to deal with these problems, experts said. By then, the number of competing private firms is expected to rise beyond 1,500, of which, up to 500 will be foreign-invested.
Vietnam expects to earn $5.5 billion from garment and textile exports, mainly to the EU and the US in 2006, up nearly 14.6 per cent against 2005.
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