Poor dyeing investment leaves mark

Many targets set in Vietnam’s textile and garment industry development strategy until 2015 with a vision towards 2020 will not come true since a sequence of textile and dyeing projects remained on the drawing board due to capital strains.

As planned, from 2011-2015 the textile and garment sector will inject capital into 20 yarn factories, 14 textile and dyeing plants and 96 garment plants with a total investment exceeding VND42 trillion ($2.02 billion).

However, the sector has had to delay most of its investment projects amid current hostile business climate.

Vitas chairman Vu Duc Giang said the investment cuts would hurt the sector’s overall development.

Estimates show that $15 million investment would be required to build a 10 million square metre annual capacity dyeing plant, where as $500,000 was needed to put a garment plant online. The sector’s proposed 14 textile dyeing plants would require $420 million.

Besides, according to Vietnam Cotton and Spinning Association chairman Nguyen Son, said environment dangers meant investors into these projects would need to pump money into standardised waste-water treatment facilities, thus scaling up investors’ capital expenditure.

To tackle the capital dilemma, the sector planned to focus on boosting garment production and export for market expansion. But, in the meantime it will call for businesses to form associations and set up joint ventures with foreign manufacturers to raise investment into specialised industrial clusters.

In the first nine months of 2011, the textile and garment sector raked in $10.5 billion in export value. However, it spent over $9 billion on material and accessories import with $5.024 billion put into importing fabrics, $805 million into cotton and over $2 billion into accessories imports.