Vietnam still to go a long way to localise textile and garment industry

Previously, Vietnam had set targets for increasing domestication ratio in textile and garment industry to 50-60 percent in 2015. However, it’s hard to realise the targets because the ratio at present was estimated at nearly 30 percent.

Textile and garment has been considered the large exporting industry in Vietnam that can help create more jobs for domestic labours. However, the increase in export turnovers does not mean that the enterprises can gain more profits, because at present, the domestication ratio was posted at below 30 percent.

In the past few years, the leaders of Vietnam’s apparel industry have proposed various investment programmes in order to realise the targets of raising the domestication ratio to 50-60 percent up to 2015. However, up to now, Vietnam hasn’t made much progress in realising the targets.

For example, in 2008, ministry of industry and trade approved for the woven fabric development programme up to 2015 with targets of producing one billion of fabric for exporting purposes. The total investment capital for this programme was posted at about $2.6 million. The programme includes construction works on industrial complex for textile industry, fibre plant and for supporting programmes such as establishing the universities, and centres of textile materials. However, up to now, many projects under this programme haven’t been started mostly, apart from the polyester fibre plant project that had been kicked off in Dinh Vu Industrial Zone, Hai Phong City by Vietnam Textile and Garment Group and Vietnam National Oil and Gas Group as the main investors.

Those projects for centres of textile materials in Hanoi and HCM City also got stuck. The Sanding textile and apparel materials (TAM) centre, that had been put into operation in mid 2008 by Saigon Garment Joint Stock Co No 2 in HCM City and Lien Anh Co Ltd’s centre of textile and leather materials in Binh Duong province were no longer in operation now.

Meanwhile, due to various reasons, the construction projects of textile and garment complexes in provinces of Tra Vinh and Thai Binh that Vietnam Textile and Garment Group (Vinatex) got approval from ministry of industry and trade for detailed plan haven’t been started.

Le Quoc An, Vinatex’s chair admitted that Vietnam textile industry still depends much on imported raw materials. From the beginning of this year up to now, the enterprises have operated in harsh conditions due to the world cotton price rose sharply by 50 percent against the same period of last year.

According to statistics showed by Vinatex, in the first three months of 2010, Vietnam’s export value in textile industry reached $2.2 billion, up 12.3 percent year-on-year while imported fabric value at $1.03 billion, up 19.3 percent.

In the coming years, Vietnam’s apparel industry is predicted to still depend on imported raw materials. Therefore, it is hard to improve the competitiveness of the country’s apparel products in the world markets.

Dautu

Tags: Vietnam Garment industry, Vietnam texttile industry