Although Foreign Direct Investment (FDI) in Vietnam has fallen significantly in the first six months of this year, it rose sharply in the textile and garment sector recently.
Several domestic and foreign-invested cotton projects are rushing to begin operating in anticipation of competing across borders after Free Trade Agreements (FTAs) go into effect.
At least 1.12 billion US Dollar out of the 5.58 billion US Dollar worth of capital inflows went into the textile sector. One of the three largest projects was capitalised at 660 million US Dollar, the highest ever in the field.
The 660 million US Dollar project, in a yarn factory in Dong Nai province, was registered by an investor from Turkey. Among others is a 300 million US Dollar project registered by a British investor in Ho Chi Min City and a 160 million US Dollar project in Tay Ninh province by a Hong Kong investor.
Prior to that, Vietnam licensed three large projects to investors from China, including 400 million US Dollar textile and garment complex in Nam Dinh province, 300 million US Dollar in Quang Ninh province and 200 million US Dollar in Hai Duong.
Smaller projects are capitalised at tens of millions of dollars. Forever Glorious, a subsidiary of Sheico Group from Taiwan, has committed to invest 50 million US Dollar in a project to make underwater sportswear.
Gain Lucky Limited belonging to Shenzhou International plans to invest 140 million US Dollar to develop a fashion design and high-end product development centre.
According to the Vietnam Textile and Apparel Association (Vinatas), once Vietnam officially joins TPP, it would enjoy a zero per cent tariff when exporting textile and garment to the US instead of 17-30 per cent tariff.
The biggest problem of Vietnam’s textile and garment industry now is the heavy reliance on imported materials. A report showed it needs to import 50 per cent of input materials to make finished products, mostly from China.
