Garment sector looks to button up hot trade

More foreign garment makers are enjoying success stories in Vietnam

The Vietnam Textile and Apparel Association (Vitas) forecast there would be a continued wave of garment and textile foreign investors flowing into the country this year, thanks to increasing export tariffs and labour costs in other foreign markets such as China, Thailand and Malaysia.

“Investors from Europe, Taiwan, Hong Kong, China and South Korea will continue engaging in this industry in Vietnam,” said Vitas’ chairman Vu Duc Giang, adding that foreign investors preferred further investing in garment factories which could help them quickly recoup their investment capital to investing into dying and textile projects, which carried environmental pollution risks.

The Danish embassy in Hanoi trumpeted that over 20 Danish companies in the textile and garment industry would come to Hanoi during March 28-30 and the southern hub during March, 31-April, 2, in search of investment and business opportunities.

They would come via commercially viable joint ventures and projects to transfer know-how and technology supported by the embassy’s Business to Business Programme with up to $900,000 per partnership.

“Vietnam’s textile and garment industry has experienced accelerated development in the last decade, and the future for the textile and garment industry in Vietnam is promising. The garment and textile industry, which happens to be associated with the second lowest labour costs in East Asia after Cambodia, is Vietnam’s biggest exporter.

However, there is still large demand for foreign know-how and investment, meaning there could be great business opportunities for Danish companies,” said a Danish embassy statement.

Denmark’s Mascot International Vietnam Company said it was planning to intensify its niche in Vietnam.

“I can confirm that we have decided to invest an additional $24 million to build our second garment factory in Vietnam. This is due to our longer term strategy for our presence in the country,” said Mascot’s managing director Thomas Bo Pedersen.

“We expect to triple our capacity with the new factory. We are now in the design phase and plan to start construction in a few months time. When the new factory is in full operation, we will have around 4,000 staff,” he said, adding that there might be scope for more Mascot investment.

Mascot experienced a strong growth in its European market of approximately 20 per cent during 2010.

“Our experience as an investor in Vietnam has been very positive and therefore it is a natural choice for us to further develop Mascot International Vietnam,” Pedersen said.

In early 2008, Mascot opened its $10 million, 15,000 square metre factory in northern Hai Duong province, about 40 kilometres from Hanoi.

Recently, Danang People’s Committee granted investment certificates to Japanese Morito group’s four garment firms comprising Oishi, Amagasaki Seikan, Inoue Ribbon and Fukui Denka Koygo for their four projects, with total initial investment capital of $15 million and total area of five hectares, to churn out garment products in the city’s Hoa Khanh Industrial Park. Morito provides garment components to the world-famous brands like Adidas, Nike, Gucci and D&G.

On December 29, 2010, northern Nam Dinh Industrial Parks  Management Authority granted an investment certificate to South Korean-backed Cheonghak Gloves Vina Company for a $1 million project to build a glove producing factory in the province’s Hoa Xa Industrial Park. This factory, built in between January-May, 2011, will annually produce two million products.