(VEN) - The International Textile Manufacturers Federation (ITMF) Annual Conference 2012 took place on November 5 in Hanoi. On the meeting's sidelines, Vietnam National Textile and Garment Group (Vinatex) Deputy General Director Le Tien Truong spoke to the media about the opportunities and advantages that the Vietnamese textile and garment industry can take to attract foreign direct investment (FDI).
(VEN) - The International Textile Manufacturers Federation (ITMF) Annual Conference 2012 took place on November 5 in Hanoi. On the meeting's sidelines, Vietnam National Textile and Garment Group (Vinatex) Deputy General Director Le Tien Truong spoke to the media about the opportunities and advantages that the Vietnamese textile and garment industry can take to attract foreign direct investment (FDI).
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Le Tien Truong |
At the ITMF Annual Conference 2012, Deputy Prime Minister Hoang Trung Hai expressed his delight at the fact that Vinatex became a member of the ITMF. He considered this event an important milestone for the Vietnamese textile and garment sector to integrate deeper into the world textile and garment industry. What is your assessment of this?
With its 120-year development history, Vietnam's textile and garment sector has made important contributions to the economy. After Vietnam became a member of the World Trade Organization (WTO), the sector obtained encouraging results. Its export revenue increased 21 percent per year on average to reach US$5.9 billion in 2006, US$15.6 billion in 2011, and US$12.6 billion in the first nine months of 2012 - 7.4 percent up from the same time last year. Vietnam is the second biggest exporter of textiles and garments to the US and the third and fifth biggest textile and garment exporter to Japan and the EU, respectively.
The textile and garment sector is set to reach an annual growth rate of 12-14 percent and an export growth of 15 percent per year by 2015
Vietnam officially became a member of the ITMF in September 2011. This important event proved Vinatex's and Vietnamese textile and garment sector's efforts to integrate deeper into the global textile and garment supply chain while providing the industry with more investment attraction opportunities.
Could you tell us about foreign direct investment (FDI) attraction in the textile and garment sector?
From when Vietnam became a member of the World Trade Organization (WTO) in 2007 to 2011, the Vietnamese textile and garment sector attracted 485 FDI projects totaling about US$2 billion in registered capital. The sector attracted 148 FDI projects in the 2007-2008 period alone. Last year, the sector attracted only 80 FDI projects due to adverse changes in the world and domestic economies.
I believe that the ITMF Annual Conference 2012 is a good opportunity for Vietnam to attract foreign investment especially investment in fabric, textile and complete dyeing industries that are weaknesses of the Vietnamese textile and garment sector.
What could help Vietnam's textile and garment sector attract foreign investors?
The sector has many advantages in terms of attracting FDI. Vietnam has 62 million people of the working age and a quality workforce. The country's average monthly labor cost is about US$150-200 per month.
Vietnam is an attractive retail market as it has a young population and is experiencing rapid urbanization. Fashion goods rank second among all commodities, after food and foodstuffs, in terms of consumer spending. About 70 percent of all consumers in the country bought fashion goods on a monthly basis.
Vietnam has become a fashion goods export center in the world market, a cotton fabric center and a textile and garment material center. WTO membership provided the Vietnamese textile and garment sector with advantages related to material, markets and policies. Vietnam signed and will sign agreements such as free trade agreements (FTA) and Trans-Pacific Partnership (TPP) in which textile and garment is an important part.
Many foreign investors said at the conference's second discussion on Vietnam's textile and garment industry that they still feel worried about the sector's investment promotion policies and development strategy. What do you think about this?
The Prime Minister approved a Vietnam textile and garment industry development plan to 2015 and a vision to 2020 and the sector has a concrete development strategy. Under this strategy, the sector will reach an annual growth rate of 12-14 percent and an export growth of 15 percent per year by 2015, and the sector will focus on developing the garment industry, increasing local content and promoting fashion design; the sector will also focus on attracting investment in production materials, spare parts, technology transfer, and complete dyeing. In the next two years, the sector will construct textile and dyeing industrial zones in northern, central and southern provinces, aimed at improving its supply chain and assuring environmental protection.
Investors in the sector can benefit from a 25 percent reduction in tax, be freed from paying tax when importing materials for export production, and benefit from a zero or five percent Value Added Tax (VAT). Vinatex will also try to provide investors with information about the sector, recommend investment locations and assist investors in workforce training and joint venture and partnership development./.
