Vietnam’s textile spinning, dyeing and weaving sectors are witnessing a new inflow of foreign direct investments (FDIs), as overseas investors are eyeing increased advantage that Trans-Pacific Partnership Agreement (TPP) can bring to them, Vietnam Cotton and Spinning Association (VCSA) said.
Foreign investors are going ahead with investing in textile and dyeing projects in Vietnam, while keeping themselves abreast of the developments related to the TPP negotiation process.
Experts have cautioned about the challenges that Vietnam could face while negotiating the issues pertaining to the textile and garment sector, particularly if the US side sets forth the principle of product origin, which could pose big problems for the country.
However, they add that if the concerned parties finalize the TPP agreement, it could prove to be greatly advantageous for textile industry of Vietnam, as it would generate several opportunities, especially in the area of spinning, dyeing and weaving sectors.
The TPP would help in increasing exports and reduce tax while attracting investments and boosting growth, they said.
According to VCSA Deputy Chair Nguyen Son, TPP would help garment and textile sector firms to enhance their productivity. During meetings with VCSA’s representatives, some Chinese firms stated that they are considering the prospects of expanding their business, or investing in spinning industry projects in Vietnam.
Even in this time of economic crisis, investors still eye great growth prospects in the textile and garment sectors, and that is why an increasing number of foreign direct investment (FDI) projects are obtaining licenses for their projects in Vietnam.
Kyung Bang Vietnam, an enterprise with 100 percent South Korean investment, has invested US$ 40 million to execute the first phase of a spinning unit project in the Bau Bang Industrial Zone in Binh Duong province. The new facility would have a capacity of 6,000 tons per annum.
Meanwhile, some other investors are busy completing the formalities before they can set up their units in Vietnam. Texhong Company, one such investor from Hong Kong intends to invest US$ 300 million to set up a spinning unit in the Hai Yen Industrial Zone in Quang Ninh province.
The Vietnam Textile and Garment Group (Vinatex) has collaborated with Japan-based Itochu to establish a joint venture project housing 50,000 spindles in Bao Minh Industrial Zone in Nam Dinh City. The project, estimated to cost US$ 120 million, is likely to kick off by year-end.
According to the US-Vietnam Trade Council (USVTC) Chair, Virginia Foote, rather than waiting for Japan, South Korea and China to join TPP to ensure the principle of product origin, Vietnam should make efforts to attract more FDI in textiles.
Fibre2fashion News Desk - India