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Large textile production zones proposed in Vietnam


HANOI - THE Industry and Trade Ministry has proposed the development of large textile and garment industrial zones to attract investment in dyeing, and fabric and yarn production.

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The 500-1,000-hectare zones would attract local and foreign investment for high-end products.
The ministry has also proposed that the government provide full support for the building of textile and garment industrial zones located in provinces and cities experiencing socioeconomic difficulties in order to create conditions for the success of small and medium startups.
The proposal also targets the development of transport infrastructure connecting the large industrial zones to ports and logistic centres to reduce transportation costs.
The Vietnam Textile and Apparel Association (Vitas), which sent to the government a document detailing the difficulties of textile and garment enterprises and proposed solutions, supports the zoning plan.
The association also suggested the government provide credit for enterprises to build wastewater treatment centres at those industrial zones.
Textile and garment exports grew in the first half of this year, but local firms face difficulties in obtaining production and export contracts for the second half, according to the ministry.
The ministry reported a 6-per-cent export increase in the first half of this year to US$12.8 billion (Bt448 billion).
The industry also saw growth in exports to its major markets, including the US, increasing by 5.9 per cent to $4.29 billion; Japan with an increase of 2.9 per cent to $1.04 billion; and South Korea with exports 15.6 per cent higher at $764.9 million.
Nguyen Thi Huyen, director of Garment 10 Joint Stock Company, said she was not optimistic about production by the end of the year, while Brexit is expected to harm the price competition for garment exports.
According to Tran Van Khang, director of Dong Binh JSC, there has been a lack of export orders since the beginning of the year, triggering stiff competition among domestic manufacturers for customers. 
Khang said his firm experienced a 30-per-cent drop in orders in the first five months, for which he blamed overstocking and falling demand in import markets. Export prices have also plunged by 10-15 per cent, while the firm still has to pay wages, insurance and transportation costs, which are on the rise, he added.
Phi Viet Trinh, deputy director of Ho Guom Garment SJC, said the company’s overseas orders fell significantly in March and April, and only started to rebound last month. 
Several trade deals, including the Trans-Pacific Partnership and the Vietnam-EU Free Trade Agreement, have not yet come into effect, so Vietnam’s garment customers could not benefit from a preferential tax regime and turned to other foreign manufacturers with more tariff advantages.
Many of Vietnam’s traditional customers shifted their orders to Myanmar, Laos and Cambodia, which enjoy reduced import duties in the US and the EU, the two largest buyers of Vietnamese garments, said the chairman of Vitas, Vu Duc Giang.
Vietnam’s textile and garment exports are expected to reach $31 billion this year.
 

Published : July 19, 2016

By : VIET NAM NEWS