Prejudices hold back garment investment

Fibre and sewing ecosystems on the chain have developed well, but dyeing and weaving are behind, photo Le Toan

According to the Ministry of Industry and Trade, the textile and garment industry continues to record positive signals, with export turnover likely to exceed $45 billion in 2024. However, in recent times, the localisation rate of the textile and garment industry has only reached about 46-47 per cent.

With that, the ability to localise Vietnam’s textile and garment export products is not broad, and has not brought much added value to goods.

“Attracting foreign investment to develop the upstream sector and achieve production self-sufficiency in raw materials is of our goals, as well as in state management agency policies. But thus far, these targets have fallen short of expectations. The majority of raw materials needed by domestic textile and apparel companies to produce their goods still need to be imported,” said Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS).

The development strategy of Vietnam’s textile and garment industry to 2030, with a vision to 2035, is oriented from rapid development to sustainable development according to the circular economic model. The industry must complete the domestic value chain, participate in a high-value position in the global supply chain, and build Vietnam’s brand for export.

While the strategy, which calls for investment in the textile and dyeing industry to minimise the import of raw materials, is deemed fair, the problem lies in how to implement it, said Giang.

“Planning for industrial areas is one approach – Rang Dong Industrial Park is located only in the northern province of Nam Dinh, and it has attracted some Japanese investors. However, the majority of other communities and units are indifferent to the wastewater issue and do not care to plan for future development. This is a challenge,” Giang explained.

According to VITAS, the structure of Vietnam’s textile and garment industry is still unbalanced between production stages. About 60 per cent of enterprises are engaged in garment production, 17 per cent in fibre production, 14 per cent in fabric production, 5 per cent in raw material production, 2 per cent in towel production, and 2 per cent of other output.

The two stages at the beginning and end of the chain, fibre and sewing, have developed on a massive scale, while weaving and dyeing have been the bottlenecks of the industry for many years. Infrastructure for dyeing and fabric production is still limited.

Some localities have even rejected dyeing and weaving projects, claiming that this industry causes pollution, although investors have stated that they will use modern processing technology that will not negatively impact the environment. Therefore, to take advantage of the high added value from Vietnam’s free trade agreements, investing in the supply chain of the textile and garment industry is an urgent need of the Vietnamese textile and garment industry.

Than Duc Viet, general director of Garment Corporation 10, said that for the supporting industry, and especially in terms of raw materials, the bottleneck lies in the perception of management agencies in provinces and ministries about the prejudice that textiles and garments pollute the environment and cannot be treated.

“Obviously, if we invest sufficiently, we can treat all waste before discharging it into the environment to meet Vietnamese and international standards. There is no reason for us to think that investing in dyeing and weaving is polluting the environment because the technology now allows it,” said Viet.

He believes that the bottleneck will be resolved if the government has plans for dyeing and weaving production areas. “If we invest to a certain extent in wastewater treatment, then awareness of ministries and branches, as well as provinces and localities, will certainly help change the story of dyeing and weaving investment,” Viet said.

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