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Raw material imports drain clothing sector profits
04
Feb '10
Over the last four years, garment export revenue of the country has been witnessing growth which has touched US $9 billion a year. However, the Vietnamese businesses are not gaining profits.

Though the country has proper climate and soil for producing cotton, the overall output of cotton is not enough to attain the requirements of the country's textile industry.

The garment companies of the country purchase around 70 percent of required raw materials mostly from China and Taiwan as the country witnesses' dearth of raw materials required to manufacture garment items.

Each year, garment enterprises of the country have to purchase $2.5 billion to $4 billion worth of raw materials, for instance, in the year 2009, country generated $9 billion revenue from the garment and textile exports, but had to purchase $5.4 billion worth of raw materials like cotton, fibre and fabric.

Under the plans framed for the development of garment and textile industry, which have been approved by the Prime Minister of the country, Vietnam will put in efforts to bring in an earning of $14.8 billion this year, $22.5 billion and $31 billion by years 2015 and 2020 respectively.

Moreover, the Ministry of Industry and Trade and the Vietnam Textile and Garment Group (Vinatex) aims to broaden the area under cotton up to 150,000 hectares, as part of the plan, in a bid to produce 80,000 tons of cotton fiber during current year, which could fulfill 50 percent of this year's total demand. For this plan, Vinatex and its member companies would need to spend around 6,500 billion dong.

Fibre2fashion News Desk - India

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