Dependence on foreign supplies makes textile sector weak

03 May '06

2 min read

Weakness in Vietnamese textile and garment sector is the result of dependence on foreign supplies for materials, hampering country's stable development, opine industry analysts.

Although the industry recorded significant average annual export growth rates of around 20 percent between 2001 and 2005, analysts fear several obstacles may hinder sustainable development, especially importing materials.

Five years after Vietnam implemented a strategy designed to boost production - including doubling the localisation rate to 50 percent between 2000 and 2005, production of woven fibre and cotton yarn fell short of targets, said industry watchers.

Local materials account for 30 percent of sector's total value, though export values are high, actual revenue gain throughout industry remains low.

Local producers can produce just 620 million square meter of woven fabric each year, and because of its low quality, uncompetitive pricing and weak distribution and marketing networks, it fails to meet standards of international importers.

Vietnam Textile and Garment Corporation (Vinatex), has set a target to produce one billion square meter cloth annually for export within next five years, in order to make Vietnam one of the top 10 textile and garment exporters by 2010, it said.

The company plans to upgrade weaving and dying factories to meet stringent standards of international clients. Its factories are to be equipped with latest production equipment, while employees are to attend training courses to enhance their skills, it said.

The US-based International Textile Group recently signed a co-operation agreement with Vinatex to support the introduction of new technologies and upgrade production centres.

Management board of Chu Lai Open Economic Zone licensed Malaysian Pamatex Berhard Group will build weaving and fabric dying factories with combined investment of $100 million.

The factories are likely to create 10,000 jobs when it becomes fully operational later this year.

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