Unlike the past when foreign investors in Vietnam’s garment and textile sectors came for processing only, they are now diversifying through direct and indirect investment via acquisitions and purchases of shares in domestic firms, with a focus on yarn, garment and accessories. This change is apparently the result of the recent free trade agreements (FTAs) signed.
Once these projects get operational, they will help to partly solve the shortage in supply of garment and textile accessories and meet rules of the new FTAs, according to a report. The Binh Duong province recently granted permission to South Korea’s Kyung Bang Vietnam to expand its investment by an additional $40 mn with the aim to raise its annual cotton yarn production capacity to 9,000 tonnes and blended yarn production capacity to 11,000 tonnes. The project aims to produce woven fabric, knitted fabric and crocheted fabric and complete woven products. With this additional capital, the project now has a total investment of up to more than $219 mn.
Taiwan’s Far Eastern Group has also spent hundreds of millions of dollars for a project of fabric and chemical yarn in Bau Bang Industrial Park in Binh Duong and continues to hire more land there to expand investment. Singapore’s Herberton Limited Company started construction of the Nam Dinh Ramatex Textile and Garment Factory with a total investment of around $80 mn. Once operational, the factory will have an annual capacity of 25,000 tonnes of fabric and 15 mn apparel items and offer jobs to around 3,000.
Foreign investment in the country’s garment and textile sector was poor earlier, but in the past three years, large enterprises from the United States and Europe have flocked to Vietnam, according to Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association.
A German group recently invested in a sheep wool yarn spinning plant project in Da lat. Groups from Israel and the United States invested in textile plants in Binh Dinh province and dyeing in Nam Dinh province.