Garment companies speed up investment

A series of garment companies have gone ahead with plans to accelerate their investment to boost exports in the post-crisis period.

According to Vietnam Textile and Garment Group (Vinatex), since 2009, over 10 subsidiaries have carried out plans to expand their production scale by setting up more factories.

Dap Cau Garment Company in Bac Ninh province, for example, has spent nearly 100 billion dong to build Dap Cau-Yen Phong Joint-Stock Company. The new company has 36 production lines with the capacity of nine million products per annum, attracting 1800 workers. The factory opened in February 2010, after eight months of construction.

Nguyen Dang Luan, the company’s Chair, explained that Dap Cau decided to build one more factory to improve export capacity. When the company prepared to put the first 16 production lines into operation, they had the chance at export contracts with three partners, Taiwanese Yasaint, Singaporean Sing Lun and South Korean Ma Ha Company.

Similarly, TNG Investment and Trade Company in Thai Nguyen province has built a fourth factory, capitalized at 210 billion dong. TNG Phu Binh Garment Factory has a designed capacity of 10 million products a year and expects to provide 4000 jobs. In the first quarter of 2011, when the new factory becomes operational, TNG will have 64 more production lines, raising total production lines to 172 and thus making it one of the largest suppliers in the garment industry.

Nguyen Van Thoi, Chair of TNG Investment and Trade Company, told Dau Tu newspaper that now is a “golden opportunity” for development. Thoi maintained that the world’s garment market is presently moving from China to Vietnam. Previously, Vietnamese companies depended on international contractors and retailing groups, but now foreign clients can connect directly with suppliers.

Thoi added that, in Vietnam, there is also a clear shift from south to north, because of cheaper labour costs in the north.

TNG has every reason to promote production: it now has very good clients – big retailers in the US and Canada, including Columbia Sportswear, The Children’s Place, and Capital. All of the clients have committed to doing business with TNG long-term, and have urged TNG to increase productivity.

“TNG now has plans to obtain growth in-depth instead of in quantity. It is striving to become a contractor that can undertake many phases in the production process for international orders by 2015,” Thoi added.

With 14 dependent subsidiaries, 11 independent subsidiaries and eight trading companies with 13,000 machines and equipment that made $240 million in garment exports in 2009, Nha Be Garment Corporation (NBC) is still moving ahead. The company will initiate a series of projects to expand production that may cost thousands of billions of dong.

Of the new projects, two are especially notable: the expansion of An Nhon Garment Company in Binh Dinh Province, which specializes in making suits for women, sportswear, and the extension of Tam Quan Garment Company, which specializes in making trousers, jackets and shirts. These two alone have investment capital of over 200 billion dong. NBC plans to put both the factories into operation in September 2010.

Duong Thi Ngoc Dung, Chair of NBC, estimated that the investment will allow NBC to increase its export revenue in 2010 by 20-25 percent over 2009.

Also in September, NBC will kick off a series of new projects, including the Nha Be-Tam Quan clean industrial complex in Binh Dinh province, and building Phu Cat production-service-trade complex.

Commenting these moves by garment companies to speed up investment, market analysts agree with expanding production scale at this moment to increase exports and create more jobs. The garment industry will develop even more strongly in the coming years, when large enterprises join forces to carry out the projects on making input materials, textile and dying.

By that time, Vietnamese firms will not simply do outsourcing tasks for foreign partners, they will be able to design and make products of their own.-Dau tu

Tags: Vietnam garment exports, Vietnam Garment industry