Despite several major new projects, the attractiveness of the textile industry seems to have remained unchanged as it continues to lure huge amount of capital from both domestic and foreign investors, the Vietnam Economic News reported on May 28.

According to Vietnam Cotton and Spinning Association, in mid June 2014, Jiangyin Zhenxin Wool Spinning Co., Ltd. (China) will coordinate with the Vietnam Cotton and Spinning Association to hold meetings with Vietnamese businesses to find partners regarding their wool production projects.

The project plans to invest in a production line with a capacity of 5,000 - 20,000 spindles and an estimated production capacity of 800-2,000 tonnes of fiber a year. Basically, Jiangyin Zhenxin Wool Spinning will support machinery and production technologies and provide a source of capital worth more than 5 million USD.

Earlier, a series of big projects from foreign investors have also been implemented in the textile industry. For example, Texhong Ngan Long Science and Technique Co., Ltd of Texhong Group (Hong Kong) has inaugurated Phase 1 and launched Phase 2 of a fabric production plant with total investment capital of approximately 400 million USD. Kyung Bang Vietnam Co., Ltd of Kyung Bang Group (the Republic of Korea) also investment and put into operation another fabric production plant (Phase 1) with investment capital of 40 million USD.

Domestic investors meanwhile are not inferior in terms of investment scale and also seized their opportunities in the sector. In early May of this year, Century Fiber JSC launched groundbreaking ceremony of a new plant, Trang Bang branch Phase 3 with total investment of 33.9 million USD. After going into operation, this plant will supply an additional 15,000 tonnes of POY and 15,000 tonnes of DTY yarn each year.

The Vietnam Textile and Garment Group has received permission from Quang Binh provincial People's Committee to invest in a fiber production plant in Quang Phuc commune, Ba Don town with a capacity of 30,000 spindles per year. The group has also signed a memorandum of understanding with the provincial people's committee to study and build another fiber plant in Gia Ninh commune, Quang Ninh district attached with a raw cotton growing region in the sand; invest in a Yarn - Knitting - Dyeing Complex for high-grade fabric production in Tay Bac Quan Hau Industrial Park.

The continual capital flows into the fiber industry were clearly due to the impact of the origin requirement from the Trans-Pacific Partnership (TPP). Accordingly, in order to enjoy the preferential tax when exporting goods to TPP markets, especially the traditional markets of Vietnam's garment industry like Japan and the US, Vietnam’s garment products must meet certain ratios of localisation rates.

In addition, although Vietnam ranks among the world’s top garment and textile exporters, the industry itself has seen an uneven development as the upstream part (sewing) develops much faster than the downstream part (materials). Therefore, the focus on developing the downstream part or being active in seeking material sources for production is a compulsory condition for the sustainable development of Vietnam’s garment and textile industry.

Along with the growing number of projects in the textile industry over the past few years, domestic fabric supplies have improved considerably and Vietnam even enjoyed trade surplus with fabric products. In the first four months of this year, Vietnam’s garment and textile exports reached 770 million USD while its imports valued only about 490 million USD, making a trade surplus of 280 million USD.-VNA