Foreign investors hope to get benefits from Vietnam's membership in CPTPP

Analysts say they can see a new investment wave in Vietnam’s textile & garment industry. Investors are rushing to pour money into the industry in hopes to get benefits from Vietnam’s membership in CPTPP and other FTAs.

Japanese Itochu has spent $47 million, or 5 billion yen, to acquire another 10 percent of shares of Vinatex, the largest domestic textile & garment corporation. With the deal, its ownership ratio in Vinatex has increased to 15 percent.

Apparel Far Eastern, the investor from Bermuda, has registered a $25 million project to make and outsource garments located in VSIP II-A Industrial Zone.

Earlier, Far Eastern Group from Taiwan spent hundreds of million of dollars on its fabric and fiber chemistry project in Bau Bang IZ in Binh Duong province. The investor has decided to lease more land to expand the production in Vietnam.

In the north, Herberton from Singapore has been implementing the project on developing Ramatex textile & garment factory in Nam Dinh province, capitalized at $80 million.

The factory is expected to become operational by 2019 with the capacity of 25,000 tons of fabric, 15 million costume products, and 3,000 jobs.

There has been no huge project in the new investment wave. Analysts noted that most the projects focus on material and accessories production, rather than outsourcing of garment products.

They have also predicted that there will be changes in the sources of investments. Previously, the investors were mostly from Taiwan and China, but South Korean investors will now lead the investment wave.

The predictions are reasonable as South Korea and Vietnam are now strategic partners. In addition, the South Korean government is following a ‘southbound policy’, encouraging businesses to invest in Southern countries, especially Vietnam.

However, the analysts said the massive investments in the textile & garment industry  still cannot lift the concerns.

Foreign investors have poured more money into yarn, garment and accessories projects, not dyeing and weaving, which are the ‘bottleneck’ of Vietnam’s textile & garment value chain.

It is difficult now to find suitable positions for dyeing factories. Local authorities tend to refuse dyeing projects for the fear that projects will cause pollution in their localities.

Nguyen Son, deputy chair of the Vietnam Cotton & Spinning Association (VCOSA), has reassured the public that not all projects pollute the environment. He said that the projects in the south, including HCMC, have been running successfully and no pollution situation has been reported.

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Tien Phuong