Vinatex has encouraged its member businesses and other enterprises inthe textile and garment industry to invest in production of materialsincluding fabric and fiber, and to form a complete material supplychain. Report by the Vietnam Economic News.
Thetextile and garment industry will be investing in material production,said Vietnam National Textile and Garment Group (Vinatex) Deputy GeneralDirector Hoang Ve Dung at a Ministry of Industry and Trade’s regularonline meeting reviewing activities in September and the first ninemonths of this year.
The ministry’s statistics showthat in the first nine months of 2013, the textile and garment industryexported products worth 13.154 billion USD, up 18 percent from the sametime last year. The US, the EU, Japan and the Republic of Korea (RoK)were the biggest importers of Vietnamese textiles and garments, withexports to these markets accounted for 49, 15, 12 and 9 percent of theindustry’s export revenue, respectively.
However,businesses said that they had to compete with rivals from other textileproducing countries in buying materials, and that material supplierstook the advantage of material shortages to increase material prices by10-15 percent. These problems affected the accomplishment of orders,they added.
Dung said that the textile and garmentindustry is relying considerably on imported materials and that thesector has satisfied only two percent of its demand for cotton and oneeighth of its fabric demand and made 140,000 tonnes of low and normalquality fiber each year. Although it made strenuous efforts, the textileand garment sector could find only 48 percent of all materials itneeded in 2013 domestically. The rate for VINATEX alone is 54 percent.
The Trans-Pacific Partnership Agreement (TPP) isexpected to be signed in late 2014. Businesses must follow fabric andfiber origin principles if they are to benefit from tax preferencesaccording to TPP. This means that Vietnamese textile and garmentbusinesses must produce materials themselves apart from making productsaccording to the order of foreign partners if they are to benefit fromTPP-based tax preferences.
Vinatex has encouragedits member businesses and other enterprises in the textile and garmentindustry, including foreign direct investment (FDI) companies, to investin production of materials including fabric and fiber and form acomplete material supply chain. In the first half of this year, thegroup implemented 46 projects with a total investment capital ofVND6.144 trillion, most of them are material production projects. Threefiber projects, including Vinatex-Hong Linh, Phu Bai 2 and Dong Vanfiber plants have been put into production to provide the market with anadditional 1,270 tonnes of Ne30 fiber. Besides, Vinatex put intooperation its Yen My textile plant, while the Texhong Group from HongKong, China put into use a fiber plant in Quang Ninh Province. Theseprojects are expected to add value to textile and garment products anddecrease the sector’s reliance on imported materials, Vinatex DeputyGeneral Director Dung said.
Speaking at the regularonline meeting, Deputy Minister of Industry and Trade Le Duong Quangsaid that the Vietnamese textile and garment industry encourages foreigninvestors to invest in developing materials in Vietnam so as sectorbusinesses can benefit from TPP-based preferences. But, foreigninvestment in this field should be controlled properly to avoid asituation in which FDI businesses sway the domestic textile and garmentmaterial market, he said.
Textile and garmentbusinesses need to continue strengthening their positions in traditionalmarkets and look for new, potential markets while taking the initiativein using resources and investing in equipment and technology. They alsoneed to develop complete production processes, shift from makingproducts according to the order of foreign partners to operating underthe mode of FOB (free on board) and ODM (original design manufacturer)to add value to products, and strengthen their distribution networks tomaintain niches in the domestic market.-VNA
Thetextile and garment industry will be investing in material production,said Vietnam National Textile and Garment Group (Vinatex) Deputy GeneralDirector Hoang Ve Dung at a Ministry of Industry and Trade’s regularonline meeting reviewing activities in September and the first ninemonths of this year.
The ministry’s statistics showthat in the first nine months of 2013, the textile and garment industryexported products worth 13.154 billion USD, up 18 percent from the sametime last year. The US, the EU, Japan and the Republic of Korea (RoK)were the biggest importers of Vietnamese textiles and garments, withexports to these markets accounted for 49, 15, 12 and 9 percent of theindustry’s export revenue, respectively.
However,businesses said that they had to compete with rivals from other textileproducing countries in buying materials, and that material supplierstook the advantage of material shortages to increase material prices by10-15 percent. These problems affected the accomplishment of orders,they added.
Dung said that the textile and garmentindustry is relying considerably on imported materials and that thesector has satisfied only two percent of its demand for cotton and oneeighth of its fabric demand and made 140,000 tonnes of low and normalquality fiber each year. Although it made strenuous efforts, the textileand garment sector could find only 48 percent of all materials itneeded in 2013 domestically. The rate for VINATEX alone is 54 percent.
The Trans-Pacific Partnership Agreement (TPP) isexpected to be signed in late 2014. Businesses must follow fabric andfiber origin principles if they are to benefit from tax preferencesaccording to TPP. This means that Vietnamese textile and garmentbusinesses must produce materials themselves apart from making productsaccording to the order of foreign partners if they are to benefit fromTPP-based tax preferences.
Vinatex has encouragedits member businesses and other enterprises in the textile and garmentindustry, including foreign direct investment (FDI) companies, to investin production of materials including fabric and fiber and form acomplete material supply chain. In the first half of this year, thegroup implemented 46 projects with a total investment capital ofVND6.144 trillion, most of them are material production projects. Threefiber projects, including Vinatex-Hong Linh, Phu Bai 2 and Dong Vanfiber plants have been put into production to provide the market with anadditional 1,270 tonnes of Ne30 fiber. Besides, Vinatex put intooperation its Yen My textile plant, while the Texhong Group from HongKong, China put into use a fiber plant in Quang Ninh Province. Theseprojects are expected to add value to textile and garment products anddecrease the sector’s reliance on imported materials, Vinatex DeputyGeneral Director Dung said.
Speaking at the regularonline meeting, Deputy Minister of Industry and Trade Le Duong Quangsaid that the Vietnamese textile and garment industry encourages foreigninvestors to invest in developing materials in Vietnam so as sectorbusinesses can benefit from TPP-based preferences. But, foreigninvestment in this field should be controlled properly to avoid asituation in which FDI businesses sway the domestic textile and garmentmaterial market, he said.
Textile and garmentbusinesses need to continue strengthening their positions in traditionalmarkets and look for new, potential markets while taking the initiativein using resources and investing in equipment and technology. They alsoneed to develop complete production processes, shift from makingproducts according to the order of foreign partners to operating underthe mode of FOB (free on board) and ODM (original design manufacturer)to add value to products, and strengthen their distribution networks tomaintain niches in the domestic market.-VNA
