Vietnamese textile & dyeing sectors seek FDI
As underlined by the experts, owing to its inability to efficiently attract investments in the dyeing and textile sectors, Vietnam has missed out many of the chances to enhance its garment exports by way of bilateral and multilateral trade pacts.
A delegation of 20 members representing the Danish textile and garment firms paid an official visit to Vietnam from March 28 to April 2, to survey the investment prospects in the country.
The Danish Ambassador to Vietnam, John Nielsen, did confirm that, the Danish firms were willing to invest in Vietnam in areas like that of fabric making and production of premium garment items, technology transfers and in sharing designing experiences.
Vietnam Textile and Apparel Association (Vitas), Secretary General, Dang Phuong Dung is optimistic that, after the visit, Danish firms would closely focus on the investment prospects in Vietnam's dyeing and textiles sectors, and if this happens it would be a positive development for the country's garment and textile industry.
Actually, the country has been exerting for over last five years to draw foreign investments in the textile and dyeing sectors. But then, hardly a few foreign investors have shown interest in these areas, as these sectors necessitate huge investment capital, while the returns are unstable.
Dung further said that, it is not only the foreign investors who are not enthusiastic about the textile and dyeing projects, but even local authorities are also not willing to welcome them in their regions. The provinces and towns as of now are concentrating on drawing foreign direct investment (FDI) in the high-technology areas, which delivers high efficiency with a smaller number of workers.
As stated by the Vietnam Textile and Garment Group (Vinatex), over the last five years it has developed 20 investment projects, and has thereby attracted investments in the textile and dyeing projects, with an intention to boost the domestic content ratio in the exported products.
Nevertheless, it did consent that it is not at all easy to find associates for the projects, as hardly a few of the enterprises are willing to invest in these sectors, in spite of the high value addition that the investments could generate and several investment incentives.
Cotton Yarn Association's Deputy Director, Nguyen Son said that, the main difficulty which is impeding the way of the foreign enterprises from investing in textile and dyeing projects is the need to set up treatment plant for liquid effluents.
Vitas too agreed to Sons statement by saying that, foreign investors are interested in investing in the textile and dyeing projects, only if they can invest in industrial zones which already have waste water treatment plants in place. However, in most of the other areas, investors themselves need to set up the system, and this thus impedes the foreign investment in these sectors.
According to the Vitas official, the country in order to draw foreign investments in the areas of textile and dyeing should restrict the incentives only to the textiles and dyeing projects and to some allied industries, instead of extending the same to a lot many areas.
Fibre2fashion News Desk - India