Foreign investors ignore textiles

There has been no foreign investor interest in textiles materials so far this year, according to the Viet Nam Textile and Apparel Association (Vitas).

However, more than 20 foreign companies have invested in clothing. Most of the money has come from South Korea, Hong Kong, mainland China and Taiwan.

Vitas said while this was still a good sign, it meant that Viet Nam was not being backed in the production of textiles and dye factories.

Viet Nam imports up to 80 per cent of the material used by the garment sector annually. Domestic companies can only supply 30 to 50 per cent of the country’s demand for cotton, fibre and other materials for making shirts, jeans and other basic clothing.

As the price of imported material has leapt by 30 to 40 per cent this year, this is creating difficulties for manufacturers.

Pham Xuan Hong, vice chairman of Vitas, said FDI was needed for the weaving and dyeing industries.

According to experts, an investment of from US$300,000 to $500,000 could build a factory outsourcing textile products for foreign partners.

To build a fibre-production factory, a minimum of US$15 to $20 million was needed for infrastructure, excluding the cost of training workers and buying equipment. In the first half of this year, Viet Nam spent $4.6 billion on imported material for the garment and footwear sectors, but garment exports reached just $4.8 billion.

To meet some of the demand for textiles, the Viet Nam Garment and Textile Corporation (Vinatex) and Viet Nam Oil and Gas Group (PetroVietnam) have built the Dinh Vu fibre production factory in northern Hai Phong City. Vinatex has also built four weaving and dyeing industrial zones to try and attract domestic and foreign investors.

The Ministry of Industry and Trade also plans to develop a material and a dyeing zone in southern Dong Nai Province by 2015. — VNS

Tags: invest in Vietnam, Vietnam FDI, Vietnam investment, Vietnam textile