Despite the COVID-19 pandemic resulting in a fall in demand for textiles and garments, Vietnamese enterprises have invested in improving production capacity, completing the supply chain and taking advantage of new-generation free trade agreements (FTAs) like the European Union-Vietnam Free Trade Agreement (EVFTA) and the United Kingdom-Vietnam FTA.

The Century Synthetic Fibre Corporation (CSF) recently approved a $120-million investment plan for the Unitex synthetic fibre factory project in the Tay Ninh province. With a capacity of 60,000 tonnes, the project focuses on recycled yarn and high-quality fibre. CSF will become the second-largest fibre producer in the country once the factory becomes operational, with a total capacity of 120,000 tonnes per year.

The Viet Tien Garment Corporation also plans to invest $13 million this year in several projects. That includes $4.3 million in setting up the Viet Thai Tech Co. Ltd to secure raw material resources.

Similarly, the Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM) announced starting construction of its Vinh Long 2 factory this year. With an investment of $10 million, the factory can manufacture 9 million items a year, according to a report in a news agency report.

According to TCM, investment in the production of raw materials was essential to boost overall capacity. With this new project, it is expected to increase revenue in the segment by 22 per cent in 2022 and 27 per cent in 2023.

New investment projects, especially in the production of raw materials such as yarn and fabric, will resolve shortages of input materials in the industry. As the production capacity of enterprises rises, these will benefit from having more resources increasing the percentage of origin as stipulated in FTAs.

Along with benefits from tariff eliminations, the EVFTA will also help promote the formation of a closed production chain, increasing added value for the industry and gradually reducing dependence on the importation of raw materials.

Fibre2Fashion News Desk (DS)

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