TPP benefits lure fabric investments

The southern province of Long An got the nod for US-based firm Trillions Enterprise to invest in the Tan Duc industrial zone (IZ), according to Tan Tao Investment Industrial Joint Stock Company, the developer of the park.

The company said the US firm would invest $120 million in a 30-hectare complex inside the IZ to provide products for global sports wear companies Adidas and Nike. The movement aims to tap into opportunities for the industry created by the Trans-Pacific Partnership (TPP).

Trillions Enterprise will partner with other American firms, including CHA Technology Group and Cosmo Fabric, in the production.

HanesBrands Inc., an American clothing brand, has decided to outsource its production facilities to Vietnam and close its underwear factory Cartex Manufactura in Costa Rica, in a bid to maximise profits, according to a Costa Rican report.

“We are making significant progress in expanding our supply chain production capability in Asia and consolidating into fewer, larger facilities located in lower-cost countries around the world,” said HanesBrands CEO Richard A. Noll.

With 50,000 employees worldwide, HanesBrands is a global clothing company that has been operating for more than 100 years. The company currently has two plants in the northern province of Hung Yen and the central province of Thua Thien-Hue. It has a wide portfolio of brands and products including T-shirts, women’s, men’s and kid’s underwear, socks, hosiery, casual wear and active wear.

According to industry insiders, a trend of increasing investment capital and expanding production scale among foreign-invested enterprises in Vietnam has arisen, as investors become more aware of the benefits that the garment and textile sector will receive from the TPP and Vietnam’s free trade agreements with its partners.

Statistics from the Ministry of Industry and Trade showed that the country attracted $5.49 billion worth of foreign direct investment (FDI) in the first half of this year. Of this, investments in the garment and textile sector was $1.12 billion, with some of the largest projects being a $274-million clothing project in the southern province of Binh Duong invested by Polytex Far Eastern Co. Ltd, under Taiwan’s Far Eastern Group, and Hong Kong’s Worldon Vietnam Co. Ltd’s $300-million project in Ho Chi Minh City. This trend continued when the sector’s FDI attraction reached $1.4 billion in the year to date, of which $900 million was increased capital. Topping the list of foreign investors that registered to increase investment during the period was Hyosung Vietnam, a wholly-invested South Korean firm, with $600 million in a fibre project to expand production in the southern province of Dong Nai. Having had a presence in Vietnam since 2007, the firm has three plants in Dong Nai specialising in spandex and nylon.

Julia K. Hughes, president of the U.S. Fashion Industry Association, shared that many US companies would wish to source from countries participating in the TPP when the agreement takes effect, and Vietnam was the highest rated in terms of ability to attract new American businesses.

According to the Vietnam Textile and Apparel Association, 60 per cent of Vietnam’s textile and garment exports are mostly concentrated in the TPP member countries, so Vietnam will enjoy preferential tariffs when it joins the TPP.