Textiles and dyeing still not attractive to investors

Very few enterprises have invested or intend to invest in textiles and dyeing, even though this sector can bring high added value and incentives to investors.

Attracting both foreign and domestic investors has always been a priority for the textile and garment industry. The Vietnam Textile and Garment Group (Vinatex) has built up 20 investment projects in the last five years and called for investment in textile and dyeing projects, which aims to increase locally-made content ratio of products.

Vinatex admitted that it is very difficult to find partners for the projects. Very few enterprises are interested, despite the high added value the investment can bring, and lots of investment incentives.

Huge capital is needed to invest in a textile or dyeing project, which is the crux of the problem.

Economic experts say that garment companies just need to spend 300,000-500,000 to set up a workshop, and they only need to do outsourcing for foreign partners to earn one dollar per product. Meanwhile, in order to invest in a fiber factory, investors must spend at least $15-20 million. Besides, they also have to spend money to train workers and pay other costly expenses.

Having realized the difficulties, most areas offer big incentives to attract investors. However, this does not mean that they can attract investors at any cost and ignore regulations. Investment projects must show environment controls, because dyeing projects can cause serious environment pollution.

According to Le Quoc An, Chair of the Vietnam Textile and Apparel Association (Vitas), the plan to step production of materials for the garment industry faces a lot of difficulties. Authorities do not reserve land funds for textile and garment projects, or ask them to install costly waste water treatment systems. Meanwhile, foreign investors, when considering investment projects, request that industrial zones already have a common waste water treatment system in place.

An commented that this is difficult requirement, because many industrial zones still do not have common waste water treatment systems. He has called on authorities to help the textile and garment industry to fulfill the one billion meters of fabric program that aims to increase the localization ratio of made-in-Vietnam products.

Dau tu

Tags: Vietnam Textiles

Posted by VBN on Apr 7 2010. Filed under Garment Textile. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry