TEXTILE AND GARMENT INDUSTRY: INCREASE IN INVESTMENT TO GRASP OPPORTUNITIES

A series of large-scale projects and optimizing solutions have been implemented by companies in the textile and garment industry to welcome the wave of economic integration, as many free trade agreements have been signed and become effective.

Strong growth

According to statistics, Vietnam's total textile and garment export turnover in the first quarter of 2015 was $ 4.85 billion, increasing by 10.5% compared to the same period in 2014. In the first three months of this year, among the main consumer markets, the United States, the European Union (EU), Japan and South Korea still showed the largest shares. In particular, Vietnam's textile and garment exports to the US market continued to lead the chart in turnover, reaching $ 2.37 billion and accounting for 48.9% of the total export turnover, increasing by 9, 5% compared to the same period of 2014. Japanese market ranked second with the value of $ 635.95 million, increasing by 7.9% compared to the same period last year and accounting for 13.1% of total turnover. Next came the Korean market with $ 472.63 million, accounting for 9.7% of total turnover, increasing by 7.3% compared to the same period last year. In general, in the first months of 2015, Vietnam's textile and garment exports to almost all markets experienced growth in turnover compared with the same period last year.

According to the Vietnam Textile and Garment Association (Vitas), the steady growth of Vietnam's garment and textile industry is mainly due to the fact that enterprises in the industry have made continuous efforts to invest in production technology and to change production methods in view of higher added values. In addition, businesses have spent a lot of resources to invest in raw material production projects, thus becoming less dependent on imported raw materials and more competitive in the export market. 2015 is considered a favorable year for the Vietnam's textile and garment export activities, as the negotiation process of some trade agreements will conclude successfully and bring more opportunities for Vietnam’s textile and garment industry. The EU market is expected to continue to be the key market for Vietnam's textile and garment industry in the near future, as there are great demands from this market and when the EU-Vietnam FTA is signed, it will create great competitiveness for Vietnam’s textile and garment exports. For the US market, the biggest expectation is that the TPP Agreement will be signed, thus lowering taxation and making it easier for businesses to expand their market share in this market.

Full-force investment

In fact, the garment industry has grown rapidly in recent years, making Vietnam one of the leading exporters along with China, India, Turkey and Bangladesh. Last year, the industry’s revenues grew by nearly 17 percent to $ 24.5 billion, with its products exported to 180 countries. With more than 4,000 active businesses, Vietnam's textile and garment industry has created 4.5 million jobs. According to Vitas Vice-Chairman Le Tien Truong, local businesses have seized opportunities to expand their markets and attract foreign investment. Nine years after joining the WTO, Vietnam's share of the US textile and garment market has grown from 3% to 10%, just behind China. Last year, the garment and textile export turnover of Vietnam saw impressive growth in major markets, with 17% in Europe, 12.5% ​​in the United States, 9% in Japan and 27% in Korea. This year, Vietnam is targeting $ 28.5 billion from textile and garment exports.

In the wake of many bilateral and multilateral trade agreements, many textile and garment companies have recently started their full-force investment. For example, in 2014 and 2015, Hanoi Textile Corporation (Hanosimex) has invested VND 1,500 billion in textile, fiber and garment production projects to expand its garment supply capacity for export. In particular, in 2014, Hanosimex disbursed 800 billion. Similarly, Phong Phu Corporation (Phong Phu Corp) said that the Company will invest VND 1,000 billion per year to expand production capacity for textile and dying industries, with the main products being knitted fabric, jeans fabric and sewing thread. In addition, some projects have started since early 2015, such as the expansion of a knitting production line in Nha Trang with the investment capital of VND 400 billion and the production of denim fabric with the investment capital of VND 860 billion at Le Minh Xuan Industrial Park (HCMC). In parallel with the investment in infrastructure, textile and garment enterprises also actively improve the quality of their products and designs and access different markets with flexibility. "In addition to traditional partners, we must actively search for new customers and expand our markets in order to achieve the highest export turnover. Furthermore, to take advantage of opportunities and further expand customer base, textile businesses need to continue investing heavily in textile commodities and raw materials. In textile commodities, we should focus on high-tech goods which require high skills and new technology," a Vitas analyst commented.

According to the Ministry of Industry and Trade, along with the active participation in the negotiation of free trade agreements, the efforts of enterprises in finding new markets for both inputs and outputs have opened up new opportunities to increase the total turnover and expand the export market share of Vietnam’s textile and garment industry. This helps solidify the role of textile products in traditional markets and open up various opportunities in new markets.

LAC PHONG
http://www.sggp.org.vn/xuctiencongnghiep/2015/5/383914/