Vinatex stitches up shake-up plan

Vinatex’s restructuring plan was finalised and has been submitted to the government for approval.

Accordingly, from 2012-2015 Vinatex will channel capital into core business areas as developing complete textile dyeing projects, promoting garment export, material supply and training.

The group set forth the targets of reaping $3.6 billion in export value by 2015 which will be scaled up to $5 billion by 2020, playing a central role in local textile garment development.

The plan has made textile dyeing investment a strategic move to help the textile garment sector establish a complete supply chain.

Under the restructuring plan, from now up to 2015 Vinatex will need more than VND20 trillion ($952 million) of this equity capital VND7.5-8 trillion ($357-$380 million) to materialise major textile dyeing projects.
Industry experts assumed sourcing such a tremendous investment amount in the next three years would be very challenging for Vinatex in current context of scarce financial sources.

Compared to other economic groups, the capital Vinatex injected into non-core areas was modest at VND225 billion ($10.7 million) out of VND34 trillion ($1.6 billion) state investment.
This amount was put into seven banks and one securities firm.

Vinatex’s deputy director Le Tien Truong underscored the group’s commitment to complete divesting from non-core areas before 2015.
The taken sum will then be pumped into strengthening its effective member firms operating in core areas.

However, how to divest to retain and further promote capital sources is extremely hard to Vinatex in current context when most firms are in the woods and the stock market sharply slid.

The group’s leadership reportedly weighed over finding partners to sell stake it has invested into firms outside core areas. Besides, the group faces big pressures associated with human resources and the time frame for developing a complete value chain.

Besides, Vinatex’s restructuring plan is being hurt by sinking global textile and garment consumption which is forecast to shed 10-15 per cent this year compared to in 2011.
This will bite into firms’ export value.