TPP drives textile, garment firms to step up production

Workers at the Dong Nai Textile and Garment Company No 3 make products for export. — VNA/VNS Thanh Vu

The move aims to help them take the advantages of the agreement in export activities after the expected signing of the agreement at year's end.

Nguyen Dinh Truong, deputy chairman of the Viet Nam Textile and Apparel Association (Vitas), said after the TPP is signed, Viet Nam's textile and garment industry will have more advantages to develop further.

Localities such as HCM City, Dong Nai and Binh Duong provinces are expected to attract more foreign investors in the textile and garment industry in the future.

The Dong Nai Industrial Garment Company based in Bien Hoa City, Dong Nai Province, has paid attention to the TPP and received many Japanese partners coming to conduct discussions about co-operation after signing of the TPP, said Nguyen Thi Bich Lien, the company director.

To prepare for the TPP, the Dong Tien Joint Stock Company has started to build infrastructure for a support industrial complex for the textile and garment industry, said Vu Ngoc Thuan, the company general director.

The complex has already attracted five investors to develop support industrial products for the textile and garment industry.

Bo Ngoc Thu, director of the Dong Nai Planning and Investment Department, said US investors in Hong Kong have planed to invest US$1 billion in Dong Nai Province to produce material for textile and garments.

However, local textile and garment companies will have difficulty in getting a preferential export tax rate after the TPP is signed because, at present, they have had to import from many countries almost all of their raw material for production.

If they want to receive the export tax rate of zero under the TPP regulation, they must import the raw material for the textile and garment industry only from TPP member countries, Lien said.

To take initiative in raw material for production, the local enterprises must pour a huge investment capital into the textile and dye stages, she said.

Viet Nam imports 6 billion metres of cloth for production of garment exports while the local textile industry produces just 1.2 billion metres.

Thuan said the difficulty with raw material will not change over the next few years because investment in the textile and dye industries is not easy.

Many provinces and cities have not encouraged investment in these industries because they are afraid of environmental problems, he said.

Additionally, small and medium sized enterprises having difficulties in capital and workforce would not be able to approach production and business opportunities from the TPP, said Thuan, adding that these enterprises have yet made a planned way to get out of their situation.

Currently, Viet Nam's textile and garment industry has 4,000 enterprises with 70 per cent of them being small and medium sized, he said.