Development strategy and vision of Vietnam’s textile and garment industry

Based on the goal of stable development of the textile and clothing industry and in line with global economic integration and the overall industrial development process from 2021 to 2030 and after 2030, the Prime Minister of Vietnam announced in December 2022 Resolution No. 1643/QD-TTg was issued on the 29th, approving the “Vietnam Textile and Garment Industry 2030 Development Strategy/2035 Vision”.

Textile and clothing are industries with very high export value and growth rate in Vietnam. They are also one of the export industries that contribute significantly to the country’s economic growth, accounting for 10% of Vietnam’s exports. 12-16% of the total amount. In 2022, despite the great fluctuations in the global economy and the growth rate of textile and clothing exports in the fourth quarter, Vietnam’s textile and clothing exports still reached US$44.4 billion, an increase of 9.7% compared to 2021. Such good results are due to the efforts of Vietnamese enterprises and the full support of the government, institutions, departments, customers and partners; in particular, local employees have always worked with the enterprise to overcome difficulties and challenges to achieve the goal of sustainable development.

The overall goal of the strategy is to develop the textile and footwear industry as the main driving force of the country’s economy, accelerate the production of internationally competitive high-quality products, and meet the needs of Vietnam’s domestic market , and maintain its status as a major producer and exporter of textile, leather, and footwear products in the world. By 2035, Vietnam’s textile, clothing and footwear industry will develop effectively and sustainably in accordance with the circular economy model; improve Vietnam’s domestic production value chain, effectively participate in the global supply chain; and cultivate regional and world-class brands.

Specifically, between 2021 and 2030, the annual growth rate of textile and clothing exports is expected to reach 6.8-7.2%, of which between 2021 and 2025 It is estimated to reach 7.5-8.0%. In 2025, Vietnam strives to achieve an export value of US$50-52 billion; in 2030, it will reach US$68-70 billion. From 2021 to 2025, the goal is to increase the localization rate of the textile and clothing industry to 51-55%, and from 2026 to 2030, to 56-60%. In addition, the industry must also be developed towards specialization and modernization, and the shift from OEM to a higher-capacity model should be accelerated.

Solution to the problem of lack of raw materials

Vietnamese textile and clothing is One of the industries that is highly dependent on the import of raw materials from other countries. Currently, Vietnam’s domestic production capacity only meets 25% of fabric demand, and cotton products are still heavily dependent on imports. If the global supply chain is interrupted, Vietnam’s textile and clothing industry will fall into a shortage of raw materials. On the other hand, if a company does not comply with the rules of origin, it will not be able to enjoy the tariff preferences of the free trade agreement. In order to solve this issue, the country’s industrial development strategy should promote the production of raw materials and auxiliary materials and investment in supporting industries; focus on the production of general fabrics and composite fabrics, encourage the use of domestic yarns in the country to produce fabrics, reduce dependence on imports, and actively increase industry links to form a complete industrial supply chain and value chain. Specific measures for the textile industry (including fibers, yarns, weaving, dyeing and finishing) are: developing synthetic fibers, functional fibers, new environmentally friendly raw materials, and producing high-yield, high-quality yarns to meet the needs of this industry. domestic demand and gradually reduce dependence on imports. Significant investments are made in the development of knitted, woven and functional fabrics. Build specialized industrial parks and large-scale specialized comprehensive parks for the textile, clothing, leather, and shoe industries (including yarn chains, textile printing and dyeing, finishing fabrics, and tanning); give priority to large-scale investment projects with good reputations, using advanced and Modern technology, using synchronized and closed production processes and ensuring compliance with environmental regulations.

Focus on positioning industrial parks

In order to connect the industrial chain to achieve the highest Production efficiency, the strategy also clearly mentions the need to attract foreign investment in the “designated” northern regions (Nam Dinh Province, Hung Yen Province, Thai Binh Province, etc.), the central region (Tang Hoa Province, Nghe An Province, Hue Province, Quang Ngai Province, Quang Ngai Province, Binh Dinh Province, etc.), and the southern region (Binh Phuoc Province, Tay Ninh Province, Long An Province, etc.), invest in professional industrial parks and professional comprehensive parks.

At the same time, guide supporting industries and raw and auxiliary material production projects to develop in the above-mentioned industry-intensive areas to reduce transportation costs and other costs and enhance product competitiveness; this will have Help solve local problems of difficulty in attracting investment and shortage of supply for textile printing and dyeing projects. On the other hand, companies still need to invest in new machines, equipment and technologies to improve productivity and product quality, reduce energy consumption, reduce wastewater and greenhouse gas emissions; increase the recycling and reuse of raw materials, fuels and waste; prioritize the use of smart technology Streamline, automate and environmentally friendly production processes to create high added value.

Increase the proportion of localization and build a Vietnamese fashion brand

The The strategy clarifies the development direction of the textile and fashion industry, and promotes and creates cohesion and coordination among manufacturing, product design and research and development, and business, thereby positioning the Vietnamese domestic market and creating fashion trends; building product brands and national brands.

Develop fashion centers in Ho Chi Minh City and Hanoi City, combining marketing and communication strategies to promote the development of textile fashion; based on the global trend of green and convenient products, Providing fashionable textile products to meet the needs of domestic and foreign travelers. FormulateDevelop Vietnamese textile, leather and footwear brand plans to introduce Vietnamese brands into the global retail chain; improve design capabilities, branding and competitiveness; study how to own well-known foreign brands.

To achieve the overall goals and directions set, this strategy provides 7 key solutions

1. Market development: Promote and diversify trade activities, provide regular, complete, accurate and timely market information, and support enterprises to diversify and expand markets. Promote and place Vietnamese textile and footwear products through entertainment activities, culture and social platforms such as drama, music, fashion and so on. Raise business awareness of the impact of free trade agreements, provide advisory services on international trade law, and focus on rules of origin and trade remedies. Develop and implement policies to protect consumers and the Vietnamese domestic market. Enterprises must also invest in and improve their marketing capabilities, actively pay attention to market trends to reach customers; strive to formulate product standards that are in line with international standards; strengthen digital transformation of management and production; and actively participate in domestic and foreign exhibitions.

2. Attract investment and develop Vietnam’s domestic value chain: On the premise of being open and attractive, Vietnam’s national management agencies have improved and invested in relevant legal systems, mechanisms and Policies to ensure compliance with international commitments and practices; in particular, the introduction of investment projects currently in short supply. Implement plans that allow domestic and foreign companies to share and transfer technology, management, and production experience. Establish a database system to share information on industrial raw and auxiliary materials so that companies can provide timely supply; establish an exchange for raw and auxiliary materials for the textile, clothing and footwear and hat industries to help companies reduce transaction costs and improve production and operation efficiency.

3. Development and production of raw and auxiliary materials: encourage investment and production of functional fibers, new environmentally friendly raw materials, high-cost, high-quality yarns, and textile production, dyeing and finishing and supporting industries. Establish a mechanism to provide financial support for wastewater and waste treatment projects in planned professional industrial zones and industrial tribes.

4. Management agency: Vietnam’s national management agency formulates and implements policies to support enterprises and investors based on the established strategic direction. The industry association will continue to propose industrial development policy recommendations to the Vietnamese Ministry of Industry and Trade and relevant ministries and commissions to protect the rights and interests of enterprises and consumers; and implement the sustainable development target plan of the textile industry.

5. Improve the quality of human resources: Strengthen human resource training in the production of textile raw and auxiliary materials, especially talent training in the dyeing, finishing, finishing, and design stages, and textile enterprises Capacity training in production management, value chain management and customer management; increasing the application of new technologies to improve production efficiency and quality.

6. Technological innovation and sustainable development, and the development of green textile, clothing and shoe and hat industries: Formulate and promulgate regulations to encourage shared technology, high-end technology and clean technology to enter Vietnam Mechanisms and policies; encourage enterprises to invest in new machines, equipment and technologies; formulate technology application policies that can promote Industry 4.0 (including: 3D printing, new materials, automation, robots, digitization, etc.), which must adopt information technology and artificial intelligence based on advanced technology; conduct training courses to convey information and improve corporate management and control capabilities on environmental issues; research and formulate value chain policies related to traceability and transparency, and comply with international standards.

7. Fiscal mechanism, taxation and funding sources: Formulate industrial investment, credit and taxation policies; support policies for vocational training such as spinning, weaving, dyeing and finishing.

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