FDI rushes into Vietnam’s textile and garment sector

Vietnam Textile and Apparel Association (Vitas) forecast the domestic textile and garment sector would further attract foreign manufacturers in 2011. It also noted that most foreign investment would be injected into garment factories with quick capital recouping potential, rather than in dyeing and textile sectors.

Vitas’ vice chairman Le Van Dao said businesses coming from Taiwan, Hong Kong and South Korea were widely present in Vietnam’s textile and garment sector.

Vitas said some Taiwanese businesses intended to pump more capital into growing their presence in the country.

For example, Eclat Textile Company Limited  - which operates a factory in southern Dong Nai province’s Nhon Trach Industrial Park - intended to put $2.5 million into acquiring a Vietnam-based garment factory to produce Polo-branded knitwear and elastic T-shirts with an estimated capacity of 3-3.5 million products per year.

The Taiwan-based firm also wanted to inject additional $4 million into setting up a new garment facility in Vietnam with an annual capacity of 2.5 million products.

In a similar case, another Taiwan-based business Makalot Industrial Company Limited, currently operating a factory in northern Hai Duong province’s Thanh Ha district, intended to pump in $6.09 million to expand footprints in Vietnam.

“The move would help us slash the soaring production costs in our China-based factories,” said a company spokesperson.

Late last week a North Korean business delegation sat in on a working session with the Vietnam National Textile and Garment Group to express its willingness to step up cooperation with local counterparts.

Deputy head Mun Pil of North Korea’s Foreign Trade Ministry’s Asia and Africa Department said the country wanted to join hands with Vietnamese partners to develop sericulture and if the project would kick-off, Vietnam would invest in production facilities and labour force, and North Korea in machine and technology.

Vitas’ Le Van Dao forecast Vietnam’s export value from textiles and garments would further grow in 2011 as rivals such as China and India faced dwindling production.

In Vietnam’s textile and garment sector, Taiwan currently operates around 240 investment projects with total registered capital of $2.35 billion, followed by South Korea with 380 projects worth around $1.7 billion, Hong Kong 80 projects and Japan 60 projects.