In recent years, the development momentum of Vietnam’s textile and garment industry has become increasingly strong. According to information released by the Ministry of Commerce of China, in 2013, the export volume of Vietnam’s textile industry was approximately US$20.4 billion, a year-on-year increase of 18%.
The breakthrough development of Vietnam’s textile industry benefits from active domestic planning on the one hand, and also due to the continuous strengthening of cooperation with the textile industries of neighboring Asian countries such as India, China, South Korea and other countries, while giving full play to its own processing advantages. At the same time, we will accelerate the attraction of foreign investment and promote the export of domestic textiles and clothing.
“Join Hands” India: Tapping the Potential of Cooperation
The garment industry is a pillar industry of Vietnam’s exports, but 80% of its raw materials rely on imports. In 2013, Vietnam and India held an investment roundtable meeting, hoping to make up for the shortage of domestic textile raw materials by strengthening industrial cooperation with India. Indian consular official Abhay Thakur said that India is rich in textile raw materials, and the textile industries of the two countries have broad space for cooperation in industrial complementarity. If trade cooperation is further strengthened, both countries will benefit from it. Thakur said that in the past 12 years, the bilateral trade volume between India and Vietnam has increased 20 times, and the total bilateral trade volume has doubled since 2009, reaching 4 billion US dollars. It is expected that by 2015, the bilateral trade volume will reach 7 billion US dollars. Representatives from both sides believe that currently, trade cooperation between Vietnam and India is far below the potential for cooperation between the two countries. During this meeting, Indian representatives also expressed a positive attitude towards strengthening cooperation between Vietnamese and Indian enterprises in the future, especially in the textile field. LePhuoc Vu, chairman of the Vietnam-India Business Forum, said that in order to strengthen investment and trade cooperation between the two countries, it is also very important to provide potential investors with corresponding trade policy information in the future. It is understood that there are currently 150 Indian companies in Vietnam, with an investment amount of approximately US$800 million.
“Marrying” China: Attracting corporate investment
China is Vietnam’s main import source of yarn and fabrics. According to statistics from the China Chamber of Commerce for Import and Export, in 2013, my country’s fabric exports to Vietnam were US$5.57 billion, a significant increase of 47.9% year-on-year; China’s exports of clothing were US$5.65 billion, a year-on-year increase of 47.9%. An increase of 45.6%. China continues to be the largest source of imports of Vietnamese fabrics and plays a vital role in the development of Vietnam’s garment industry. In order to promote the development of its own textile and garment industry, Vietnam has not only continuously strengthened cooperation with Asian countries and gradually reduced its dependence on raw materials, but also attracted more and more international companies to invest in Vietnam through the country’s cheap labor advantage. According to statistics, by 2013 In August, Chinese companies invested in a total of 915 projects in different provinces, cities and regions in Vietnam, totaling US$4.8 billion, including many Chinese textile and garment companies.
According to reports from the Vietnam News Agency, if Vietnam’s clothing and textiles are exported to member markets after the signing of the Trans-Pacific Partnership Agreement, the tariff rates will be significantly reduced. Some Chinese companies are considering moving their production plants to Vietnam. In order to strive for the benefits of the Trans-Pacific Partnership Agreement in a timely manner, for example, Texhong Textile Group Co., Ltd. invested more than 200 million US dollars to build a factory in Nhon Chak Industrial Park, Dong Nai Province, Vietnam, and is currently investing 300 million US dollars to build a new textile factory in Quang Ninh Province, Vietnam. The factory has just been completed and put into operation; Hong Kong China’s TAL Garment Group plans to invest US$200 million in Vietnam to expand its production scale in Vietnam; China Sunrise Co., Ltd. and other groups are also actively looking for investment opportunities in Vietnam.
“Partnering” with South Korea: Promoting trade exchanges
In 2013, Vietnam signed a cooperation agreement with the Textile and Apparel Association of South Korea in order to benefit from the ASEAN-Korea Free Trade Area (AKFTA) Agreement. The agreement was jointly signed by the Vietnam Textile and Garment Association and the Daegu Gyeongbuk Textile Industry Association of South Korea. According to the agreement, the Vietnam Textile and Apparel Association and the Daegu Gyeongbuk Textile Industry Association of South Korea will promote the release and exchange of trade show information between the two regions, promote the organization of other trade promotion activities, and will facilitate the textile and apparel enterprises of the two countries to enter each other’s Develop marketing channels for the market.
Soon thereafter, two Korean textile companies established textile factories in Vietnam. Korea KyungBang Yarn and Fabric Manufacturing Co., Ltd. is a leading enterprise in Korean yarn and fabric manufacturing. It invested US$40 million to establish a spinning factory in Vietnam. The factory covers an area of 16 hectares and has an annual yarn production capacity of 6,600 tons. Lee Kap Soo, chairman of KyungBang Vietnam Company, said that this factory will provide yarn raw materials for local textile and garment companies. In addition, KyungBang has also signed supply contracts with 10 companies in Vietnam. Although it has been affected by the financial crisis, he believes that the Vietnamese market has more development potential than other regional markets. In addition, South Korea’s JungWooVina company spent US$14 million to establish a textile factory in Vietnam.