The International Finance Corporation (IFC) has been implementing the Vietnam Improvement Program to empower textile and apparel companies to upgrade their machinery and equipment to turn more sustainable, energy-efficient and globally competitive, apart from boosting their revenue from exports and offering them financing routes through its client banks.
The Vietnam Improvement Program, an initiative to improve resource efficiency in the local apparel, textile, and footwear sector, works with factories that supply to large retailers and clothing companies.
Since 2016, the program has enabled 70 factories in the country to invest $26 mn in resource efficiency measures, helping them save $24 mn in water, energy, and chemical operating costs, according to an IFC.
Through IFC support, Phong Phu International (PPJ), one of Vietnam’s leading textile factories, brought laser machines to ‘dry process’ denim apparel, a technique used to achieve the cool, faded look some consumers crave.
With the lasers, around 300 jeans can be dried in a day, a huge jump in productivity from the labour-intensive manual process, which allows for only 20 to 30 daily, and exposes workers to harmful chemicals. Apart from landing more orders, the measures helped PPJ slash its energy consumption by almost 7 mn kilowatt hours per year, and use 200,000 cubic mtr less water annually. This allows it to save as much as $700,000 a year.
Vietnam’s textile and garment factories are also among the world’s most energy-intensive ones, using up one tenth of the total energy consumed by all industries in the country, says IFC. When the program’s recommendations are fully implemented over the next three years, the $40-mn capital investment—required for retrofits and more efficient equipment—could collectively save 4 mn cubic mtr of water and curb 788,500 tonne of greenhouse gas emissions annually.
This is equivalent to removing 1.1 mn new cars from the road. Energy consumption in this sector alone could decrease nationwide by 30 per cent with technology upgrades and improved efficiency, claims IFC. On IFC’s recommendation, Samil Vina Co. Ltd, another strategic supplier for Target, sought a bank loan to install more advanced dyeing machines, which use significantly less water, energy, and chemical to dye textile.
With IFC’s advice, Samil Vina borrowed $4 mn from Vietnam Industrial and Commercial Joint-Stock Bank, an IFC client that finances energy-efficiency projects at affordable terms. Improvements followed as soon as the upgrades were installed.