Vietnam’s textile industry has great demand for foreign investment
Vietnam’s “Investment News” reported on August 25 that Vietnam’s textile industry still has great room for development and has huge demand for foreign investment.
According to statistics from the Foreign Investment Bureau of the Ministry of Planning and Investment of Vietnam, as of May 18, 2022, there are 2,787 valid foreign direct investment projects in Vietnam’s textile industry, with a total registered capital of $31.3 billion.
The massive influx of foreign capital has rapidly increased the production capacity and export scale of Vietnam’s textile industry. Vietnam’s total textile and apparel exports exceeded US$36 billion in 2018; they will reach US$40.3 billion in 2021, of which foreign direct investment accounted for more than 60% of total exports.
Although the scale of Vietnam’s textile industry continues to expand and has become an important link in the global supply chain, there are still “bottlenecks”: the production of fabrics, yarns, and accessories is insufficient. balanced.
Nguyen Anh Tuan, deputy director of the Foreign Investment Bureau of the Ministry of Planning and Investment of Vietnam, said that Vietnam’s textile industry lacks connectivity in the value chain. Vietnam has a large trade surplus in yarn and clothing, but also a large trade deficit in fabrics. The yarn produced is mainly for export, while domestic fabrics only meet nearly 50% of demand, causing Vietnam to import more than 10 billion US dollars in various fabrics every year. The shortage of fabrics is a potential market that attracts foreign investment in Vietnam’s fabric and yarn production.
Data from the General Administration of Vietnam Customs shows that Vietnam’s textile raw material imports reached US$14.3 billion in 2021, an increase of 20.6% over 2020, accounting for 15% of the total imports of raw and auxiliary materials in the textile and apparel industry. 60.0%. Among them, imports from China, South Korea, Taiwan, Thailand and other markets have increased sharply.
Although Vietnam’s textile and clothing exports exceed 40 billion US dollars, Vietnam cannot produce its own raw materials such as cotton, yarn and fabrics. Imports of textile raw materials in 2021 reached US$23.86 billion, an increase of 21.3% over 2020.
The United States, the European Union, South Korea, and China are Vietnam’s four major export markets, with the average annual import of textiles, clothing and yarn from Vietnam reaching US$24 billion (2021). However, the above-mentioned markets are implementing many new regulations on imported clothing, such as requiring products to be green, chemical-free and recyclable. Therefore, if investment funds are not directed in this direction, Vietnam’s textile and apparel exports will be difficult to maintain the top three positions.
“The textile industry should selectively attract foreign investment, give priority to investment in advanced textile printing and dyeing technology projects, do not cause adverse effects on the environment, and establish ties with domestic garment enterprises, Form a full value chain and green textile technological solutions.” Ruan Yingjun said.
Mr. Truong Van Kim, Vice Chairman of the Vietnam Textile and Apparel Association, further emphasized the increasing requirements of importers, such as the production technology of yarn, fabric, printing and dyeing industries must meet the green requirements of the entire supply chain , reduce energy and water consumption, protect the environment and transparency and other requirements.
Currently, most Vietnamese companies in the textile and clothing industry process for big brands and have accepted the “green” requirements in production, such as fulfilling social responsibilities, environmental protection and emission reduction wait. The new generation of free trade agreements that Vietnam participates in are also committed to environmental protection and low emissions.
Mr. Jin suggested that the Vietnamese government approve the textile industry development strategy as soon as possible, establish a large-scale textile industrial zone, and solve problems such as fabrics, printing and dyeing, and chemicals to promote enterprises to invest in fabric production.
AAA composite fabric network VEGTRHYTJ
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