Vietnam’s textile industry must shift to investing in upstream industries
According to Vietnam’s “Investment News” report on August 9, the textile industry is Vietnam’s second largest export industry and has shown double-digit growth. It has always attracted a large number of investors. However, its upstream industries, such as weaving, dyeing and finishing industries, are difficult to obtain investment due to concerns about environmental pollution in various places. This has led to the current uneven development of Vietnam’s textile industry and a lack of fabrics, which in turn has resulted in restricted industry development and low production added value. In 2018, Vietnam’s textile industry exports were approximately US$36.2 billion, but imported raw materials and accessories alone amounted to US$23.6 billion, of which imported fabrics were approximately US$12.8 billion, various textile industry accessories were approximately US$5.47 billion, cotton was US$3 billion, and textile yarns. Approximately US$2.419 billion. In the first seven months of 2019, Vietnam imported fabrics of approximately US$7.765 billion, a year-on-year increase of 4.5%, of which fabric imports from China were nearly US$4 billion, an increase of 10%, imports from South Korea were approximately US$1 billion, and imports from Taiwan, China were approximately US$977 million. Imports from Japan were approximately US$382 million. Fabric imports are expected to continue to grow, with fabric imports expected to be approximately US$14 billion throughout the year, an increase of US$1.2 billion from 2018.
Reports say that due to the lack of dyeing links, 2/3 of the textile yarn produced in Vietnam must be exported. EVFTA’s rules of origin requiring textiles to “produce fabrics locally” and CPTPP requiring “textile yarns to be produced locally” will certainly promote Vietnam’s textile industry to shift towards investing in these upstream industries.
According to the Vietnam Textile Association (VITAS), some projects dedicated to producing fabrics have been rejected by local governments in the past few years, such as the Hong Kong-based TAL Group’s proposed project in Binh Thuan, Vinh Phuc The $350 million cloth dyeing project in the second phase of the Boshan Industrial Zone was rejected by the local government. There is indeed a risk of environmental pollution in the fabric dyeing process, but if the project also invests in wastewater treatment processes, it should be approved.
In response, the Government Office has issued a document to the Ministry of Industry and Trade stating that the Prime Minister requested the Ministry of Industry and Trade to coordinate with various localities to resolve this industry problem.
AAA fabric network ERT5Y4375JTY
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