Viet Tien Garment Corporation - Cooperating for Development

The establishment of Vinatex group operating in the form of holding company is a turning point in the company’s development process, lifting Viet Tien to a new high toward diversifying ownership and business scopes. This radical change in business thought of the company’s senior officials will stimulate Viet Tien’s sustainable development in the future. So far, we have established more joint stock companies, joint venture companies and expanded operations to other sectors, such as allying with banks to produce ATM cards.

 

Vietnam will integrate further into the world economy; therefore, we affirm that with the achievements, Viet Tien will become strategic partners of foreign investors in the coming time, promoting joint ventures to mutually support expanding operations towards multi-sector, multi-field and multi-management models, to optimally exploit the potential of domestic and foreign markets. We have a guideline “Cooperation is for development.”

 

What has brought success to Viet Tien when the company’s products are now present in many countries all over the world?
In my knowledge, foreign companies and groups are often interested in well-known enterprises which have certain position in the domestic market. Viet Tien has built its own brand name, step by step conquering the domestic market and trying to reach the leading position in the midst of severe competition among companies on the market. Products are incessantly improved in quality, with competitive prices. The most important thing is that Viet Tien has established a network of agencies across the country, ready to best serve its customers, which has helped Viet Tien quickly occupy domestic market. Moreover, Viet Tien has also gained quality management standard ISO: 9001-2000, social liability SA: 8000, and paid attention to developing its human resources, renovating equipment and technology, reducing costs, expanding production and building business culture. With the above achievements, big foreign customers and potential partners such as the U.S., some countries in Europe, and Japan can easily recognise the company’s capacity and development potential. This is an important foundation for Viet Tien to stand firm and develop on the market, as today shows. Of course, many valuable contracts will be signed then.

At present, Viet Tien’s garment products are exported to 62 countries. Top exporters are the U.S., Japan, EU and ASEAN countries. The company gained export earnings of US$240 million in 2006. Viet Tien has also registered to protect its trade name in America, Canada and is in the process of registering its trade name in European countries, as well as 6 countries in the ASEAN block. Viet Tien has signed garment contracts for six months of this year, with total value of US$176 million. These contracts mainly come from three key partners, including the U.S. with 34 per cent in value, Japan 28 per cent, Europe 18 per cent, and the rest from other markets. Key products are shirts, trousers, and jackets.

The U.S. market is considered Vietnam’s most important and biggest exporter in coming years. Currently, this market imports about US$1,700-1,800 billion each year and the figure grows each year, as this country’s industry and agriculture account for only 20 per cent of GDP and tend to decrease due to increasing labour cost. Such an attractive market will surely draw interest from Vietnamese enterprises. Vietnam companies have started trade activities with America since 2002, when the Vietnam-America Trade Agreement was signed. Meanwhile, rivals from other countries have traded with this market for a long time.

 

Vietnam has an advantage in labour; however, the production of many Vietnamese export products is dependant on imported materials. Vietnam has a staff of skilled labourers and if they are systematically trained and managed, they will be able to produce products of high competitiveness and added value. In order to overcome this disadvantage, Vietnamese enterprises should choose high value-added commodities. If doing so, Vietnamese products will be able to compete with products from other countries, especially China.

 

On the other hand, if Vietnamese enterprises still do not have the ability to design and develop products, and their own brand name, they should focus on reorganising and improving production to manufacture competitive products for American companies, and deliver goods on time with high quality, in order to maintain long-term and stable contracts. On that basis, they can train a group of good designers and accumulate capital. Vietnamese garment enterprises should focus on those targets in 3-5 years.