Concerns persist despite soaring fibre export

Vietnam reaped over $1.9 billion from fibre exports in the first nine months of this year, whereas total import value from the product amounted to $1.1 billion.

The fibre industry’s capacity has soared in recent years, thanks to the deployment of a string of major projects from both domestic and foreign investors.

However, most locally-made fibre has been exported, due to the textile dyeing sector’s downturn.

According to Dang Trieu Hoa, general director of Ho Chi Minh City-based Century Synthetic Fibre Corporation, more than 70 per cent of the company’s production output was dedicated for export to Europe and Asia to high-grade fabric producers who act as material suppliers for global brands like Nike, Adidas, Uniqlo, Decathlon, Puma, Columbia, and Guess.

In mid-September, the company inaugurated Trang Bang 3 fibre plant in the southern province of Tay Ninh, with a total investment capital of VND735 billion ($33.7 million) and annual production capacity of 30,000 tonnes.

Trang Bang 3 plant helped boost the company’s capacity from 37,000 tonnes to 52,000 tonnes of fibre annually.

Deputy chairwoman of Vietnam Textile Apparel Association (Vitas) Dang Phuong Dung was quoted as saying that soaring investment and expansive production versus the textile dyeing sector’s slow improvement has currently lodged the textile clothing industry into a bottleneck.

As Vietnam is not good at dyeing, the country often has to export unprocessed fabric to South Korea, where the foreign partners have the capacity to turn the product into fine fabric for re-import into Vietnam to feed production needs, Dung added.

Dung also said that textile and clothing is one of the industries supposedly set to benefit the most from export market expansion once the Trans-Pacific Partnership Agreement (TPP) is ratified and comes into effect. However, the TPP’s stringent yarn-forward principle regarding product origin could place local textile garment firms at a disadvantage, with fewer opportunities for tax breaks.

That is because Vietnam has mainly imported materials (such as fabric, fibre, etc) from China, who is not a TPP member.

Vitas figures show that Vietnam’s total fabric import value came to $7.5 billion in the first nine months of this year (up 10 per cent on-year) and is expected to surpass $10.5 billion for the whole year, against $9.5 billion last year.