Vietnam's Textile and Garment Industry has seen fast and sustainable growth over the past years, playing an imperative role in the nation's socio-economic development. In 2012, the sector gained US$17.2 billion in export turnover, posting a year-on-year increase of 8.5%. The textile and garment sector plans to maintain a growth rate of nearly 10 - 12% and attain US$ 18.5-19 billion in 2013, as per Vietnam National Textile and Garment Group (Vinatex). Vietnam also expects to pocket US$ 8.5 billion from shipments to the US market (up 11%); around US$ 2.4 billion from Japan (up 18%); US$ 1.5 billion from the Republic of Korea (up 15%); US$ 2.4 billion from the EU and US$ 4.2 billion from other markets by the end of 2013.
Vietnam has become a strong player in the global textile market and plays a major role in increasing the country's prosperity. The Vietnamese textile industry, with more than 3,800 companies, is the leading export sector. State-owned enterprises make up just 0.5% of Vietnam's businesses; however, 75% are joint stock or limited companies. The country ranks fourth worldwide in textile and apparel exports in 2011 ranking. Some of the leading textile and apparel companies like Sumitomo, Tomen, Tommy Hilfiger, Victoria's Secret, and Wal-Mart, Itochu, JC Penney, Jupitar, Kmart, Kowa, Lee Cooper, Li & Fung source their apparel from Vietnam due to the cheap availability of labor.
The Vietnamese textile and apparel industry has ambitious target plans, with investment capital estimated to total approximately US$25 billion till 2020. The possibility of a Trans-Pacific Partnership Agreement (TPP) has ushered in a new wave of foreign investments in spinning, weaving and dyeing sectors. Kyung Bang Vietnam, a 100% South Korean invested enterprise, has spent US$40 million to implement the first phase of the project on the spinning factory with the capacity of 6000 tons per annum in the Bau Bang Industrial Zone in Binh Duong province. Texhong, a Hong-Kong based company is planning to build a spinning factory with the estimated investment capital of US$ 300 million in the Hai Yen Industrial Zone in Quang Ninh province. Vinatex has also joined forces with Japanese Itochu to set up a joint venture to run a 50,000 spindle factory, capitalized at 120 million dollars in the Bao Minh Industrial Zone in Nam Dinh City.
Vietnam's GDP is expected to touch US$ 235 billion by 2025 and the garments and textiles may bring an export turnover of US$ 28.5 billion by 2025. The future of the Vietnamese textile industry looks superlative owing to the continuous efforts made by textile companies to upgrade their equipment to enhance their competitiveness. Also, the Vietnamese government is highly supportive to the textile and garment sector, as they have established a series of incentives to attract and encourage the kind of FDI which is most likely to drive the country's future development.
(Source: Insight Alpha)
Vietnam