The garment and textile industry of Vietnam is aiming to reach a localization rate of 60 percent by 2015, and thereby reduce dependence on imported inputs, Le Trung Hai, vice president of the Vietnam National Textile and Garment Group (Vinatex), has said, Viet Nam News reported.
Speaking to reporters during the recent Saigon Tex exhibition for international textile and garment manufacturers and accessories makers, Mr. Trung Hai said the increase in localization rate, which means the amount of domestically produced materials used in making a final product, would also help the textile and apparel firms to increase profits and raise their competitiveness in the global market.
He said at present the Vietnamese clothing industry heavily depends on imported raw materials and increasing the localization rate is important as Vietnam is currently negotiating some trade agreements, including the 12-nation Trans-Pacific Partnership (TPP) agreement. These agreements would benefit Vietnam only if the industry used domestic raw materials.
Besides raising the localization rate, Vietnamese apparel and textile firms are also aiming to increase the Free on Board (FOB) rate to 50 percent by 2015 from 38 percent at present, Mr. Trung Hai informed.
Efforts to grow cotton, the main raw material for the textile and garment industry, are currently underway in Ninh Thuan and Dac Lac provinces, according to Vinatex. Moreover, many new projects for setting up textile plants are coming up in several provinces of the country.
According to the Vietnamese Ministry of Industry and Trade, the country’s garment and textile industry recorded its highest growth of 20.2 percent in the initial three months of 2014, compared to the growth rate of 4.9 percent for the entire industrial sector. Accordingly, the exports of garments and textiles from Vietnam also surged up by 21.9 percent to US$ 4.5 billion in the first quarter of the current year.