Vietnam Overseas

Vietnam Textile and Garment Industry, Fabric and Garment Accessories EXPO 2007 officially kicked off on April 17 in Ha Noi.

The three-day exhibition has drawn 350 companies involved in textile and garment industry.

This is an opportunity for companies to propagate their trademarks, investment opportunities and new technology, said organizers.

Executive Director of the State-owned Vietnam National Textile and Garment Group (Vinatext), Dang Phuong Dung, said in recent years, domestic garment and textile companies have been growing by an annual 20 percent.

In 2006, garment exports hit 5.93 billion USD, up 20 percent for the year. The figure represented about 15 percent of the country’s total exports.

Locally, there are nearly 2,000 companies involved in the industry: 27 State-owned enterprises, 1,400 locally owned and 450 foreign-invested companies. The industry employs about two million people.

Dung urged foreign and local companies to invest in high-end garment and textile products, such as compact yarn, industrial canvas, polyesters and denim dying.

Posted April 19, 2007, Source: VNA, Vietnam Net Bridge

In a country whose peasant army once marched on flip-flops cut from old tires, Gucci beach sandals priced at $365 can come as a shock. But the luxury market is booming in Vietnam, where Ho Chi Minh’s communist revolution exalted equality and the common man just a generation ago. As the country begins to embrace private enterprise, its nouveaux riches are snapping up shoes at Gucci, handbags at Louis Vuitton and watches at Cartier, offering proof of how much the country has changed after decades of war. “I sold a $4,000 leather jacket recently,” said Do Huong Ly, a stylish young saleswoman at the Roberto Cavalli shop in Hanoi. “Our customers want people to know that they are high-class.” Not long ago, displays of wealth were frowned upon in Vietnam. Those tire-sandaled troops who bested the French colonial army and outlasted the Americans embodied frugality and egalitarianism. The revolutionary government snatched up the assets of the wealthy and redistributed them to the poor. But since the late 1980s, a government that once micromanaged all economic affairs has been introducing free-market reforms and courting foreign investors, and with them have come new western styles and attitudes. “Members of the new generation want to enjoy life and pamper themselves with luxurious things,” said Nguyen Thi Cam Van, 39, who has purchased five $1,000 handbags at Louis Vuitton. “If I can afford to buy something nice, it makes me feel proud,” said Van, who works at Siemens and also consults for a Vietnamese import company. “It lets you show people your taste and style.” One of her friends has 50 Louis Vuitton bags, Van said. “I think five is enough.” Some of Vietnam’s shopaholics are young people who work for multinational corporations but still live rent-free with their parents. Others work for powerful state-owned companies and many have made fortunes in Vietnam’s small but booming private sector. They indulge their urge to splurge at Dolce and Gabbana, Burberry, Escada, Rolex, Clarins, Shiseido and the like. In the two decades since Vietnam began implementing its economic reforms, the nation’s poverty rate has been cut in half, and per capita income has doubled in the last five years. Still, most workers in this nation of 84 million people still earn just a dollar or two a day toiling in the farm fields. Those working low-wage jobs find the new lust for luxury hard to stomach. “The rich are getting richer, and the rest of us are struggling to make ends meet,” said Dao Quang Hung, a Hanoi taxi driver. “The money they spend on a Louis Vuitton bag could buy several cows for a farmer’s family and lift them out of poverty.” At the new Gucci shop in Ho Chi Minh City, the flip-flops are among the economy items. The black-clad sales staff, looking fresh off a fashion show runway in Milan, offer a pair of golden, spike-heeled shoes for $765. Across the hall at the Milano store, the display last year featured a $54,000 Dolce and Gabbana dress, one of just three in the world, according to marketing director Dang Tu Anh, who represents both stores. The others, Anh said, were worn by film star Nicole Kidman and Victoria Beckham, the former Spice Girl. Milano’s best customers, Anh said, think nothing of dropping $5,000 on a handbag and a pair of shoes. “If they can buy something luxurious, it proves they have money,” Anh said. “And that’s good.” Vietnam’s older generation, shaped by the hardships of war, finds itself at odds with younger Vietnamese over the new consumerism. “Now the younger generation in Vietnam is racing for materialistic enjoyment,” said Huu Ngoc, a 90-year-old scholar and author. “Individualism is destroying our cultural identity. We may become richer but lose our soul.” The war generation wasted nothing and always saved for the future, convinced that catastrophe lurked around every corner. But opinion surveys show that the 60 percent of Vietnamese born after 1975 are very optimistic about the future _ and determined to enjoy the here and now. Van, for example, enjoys pampering herself at the salon with massages and manicures. But she lives in fear that her father, a college professor, will learn about her five Louis Vuitton handbags. “I can’t tell him I have these,” she said. “And I would never tell him how much they cost. He would think that I was completely irresponsible.” Van’s indulgences are modest compared to those of Vietnam’s super elite, who tool around in the ultimate status symbols: a shiny BMW or Mercedes-Benz. And pay cash. “In America, you pay in installments,” said Nguyen Hoang Trieu, luxury car dealer in Ho Chi Minh City, the former Saigon. “Here, you pay all at once, in cash. Sometimes people come in here with $400,000 in a suitcase.”

By BEN STOCKING, Associated Press Writer AP - Monday, September 24

Vietnam plans to double the value of its textile and clothing exports from US$4.8bn in 2005 to US$10bn by 2010, according to a new report by Textiles Intelligence. At the same time it hopes to double the number of people working in the industry from 2m to 4m.

Vietnam’s textile and clothing industry plans to achieve these targets by streamlining production and thereby reducing unit costs to boost international competitiveness. On the way towards achieving its 2010 objective, the industry has set an export target for 2007
of US$7bn.

Export growth since 2000 has been steep. It was particularly strong in 2002 at 40% and in 2003 at 33%.

But growth in 2005 slowed to just 9.4%. This was due mainly to the fact that quotas restricting imports from other Asian countries were eliminated at the beginning of the year but imports from Vietnam into the USA - Vietnam’s largest export market - were still subject to quotas. US retail buyers therefore turned to countries such as China and India for their clothing.

In 2006, however, the USA implemented safeguard quotas on several categories of Chinese textiles and clothing, with the result that buyers returned to Vietnam. As a result, Vietnamese exports soared by 20.8% to US$5.8bn.

Another milestone was reached on 11 January 2007, when Vietnam joined the World_Trade_Organization (WTO) and the USA was obliged to remove all quotas on textile and clothing imports from the country.

This removal of quotas is widely expected to boost US demand for Vietnamese clothing, especially for lower-end products.

Exports will have to increase by 20.7% in 2007 to reach the government’s interim goal of US$7bn. However, if this is achieved, average growth of just 12-13% per annum between 2007 and 2010 will be enough to reach the government’s US$10bn goal.
 

Investment plans for increased exports
In order to achieve its goal, the Vietnamese government has come up with two main policy objectives.

• One is to shift the focus in garment manufacturing from CMT (cut, make and trim) to FOB (free on board) production.

• The other is to increase the domestic content of garment production by investing in cotton production, and in spinning and weaving facilities.
 

The government has also identified three other aims for the industry.

• One aim is for the industry to build on its existing reputation for high quality by moving from the lower end of the market to the mid-range and the high end of the market.

• A second aim is for the industry to become more efficient in the sourcing of materials. This is to be achieved by:
- increasing Vietnamese textile production;
- implementing more efficient import sourcing methods; and
- achieving further vertical integration by adding upstream capacity.
 • A third aim is to increase the competency and productivity of the industry by enhancing research, training and development.
 

The government is planning to invest around US$3bn in developing the textile and garment sector during the run-up to 2010. It is envisaged that US$180m will be spent on projects to expand raw material supplies, US$2.27bn on textile and dyeing projects, US$443m on garment projects, and US$200m on trade centres and personnel training.

Meanwhile, state-owned Vinatex plans to invest over US$1bn in 24 key expansion projects from 2006 to 2010. According to Vinatex, these projects aim to develop production and distribution systems, fashion design and infrastructure.

One sector targeted for expansion is raw cotton production. To process the additional cotton produced, Vinatex plans to invest US$26.7m in the construction of five new cotton processing mills during the next two years in a bid to satisfy demand for raw materials from the country’s textile producers.

Further down the supply chain, Vinatex expects to produce over 400m square metres of fabric per annum by 2010, including 270m square metres for export.
 

Import trends
Vietnam currently relies on substantial imports of fibres, yarns, fabrics and garment accessories to feed its expanding apparel industry. In 2004 the value of imports of these items reached US$4,601m - more than double the US$2,284m worth of imports absorbed in 2000.

Imports of cotton, yarn and fabrics reached US$3,722m in 2006 - more than treble the US$1,089m worth of imports absorbed in 2000.

The most important import item is fabric, upon which Vietnam’s garment industry is heavily dependent. In 2006 fabric imports were worth US$2,954m, compared with only US$761.3m in 2000. Thus fabric imports rose in value by 288% over the six-year period.

The government has a clear strategy of increasing the supply of domestically produced inputs such as raw cotton, yarns, fabrics and garment accessories. Its overall aim is to reduce the import content to less than 25% by 2010.
 

Machinery investments
Investment in modern machinery has soared in recent years. During 2006 the industry added 171,720 new spindles and 5,840 open-end rotors. This followed an extended period of expansion during the ten-year period 1997-2006 when 840,132 spindles and 19,784 open-end rotors entered service.

In the weaving sector the industry added 6,012 shuttleless looms during 1997-2006, of which 1,357 alone were added to the industry’s capacity in 2006 following the addition of 476 in 2005. This shows convincingly the move towards modern manufacturing technology.

The Vietnamese textile and clothing industry has also managed to attract a substantial amount of foreign investment. The largest foreign investor in the Vietnamese textile and clothing industry is Taiwan, followed by South Korea and Hong Kong.

“Prospects for the Textile and Garment Industry In Vietnam” was published by Textiles Intelligence in Issue No 129 (May-June 2007) of Textile Outlook International.

Posted  8 August 2007, Source: just-style.com

Vietnam’s textile and garment industry has developed rapidly in recent years and has become a vital activity within the country’s economy. In 2004 it employed 2.1 mn people directly, representing 4.7% of total employment within the country.  The industry has a number of leading textile and garment enterprises. One of the largest is the state-owned Vinatex, which accounted for an estimated 22% of Vietnamese textile and garment exports in 2006. One of Vinatex’s affiliates, Viet Tien Garment Company, has invested more than US$10 mn during the past five years in order to upgrade its production lines. Most of this new equipment has been imported from Japan and Singapore. Also, in 2006 the sector exported textiles and garments to the value of US$5.8 bn, making it Vietnam’s second largest export earner after crude oil. Buyers from a number of the world’s leading textile and apparel companies have sourced apparel from Vietnam including Express, Hucke, Itochu, JC Penney, Jupitar, Kmart, Kowa, Lee Cooper, Li & Fung, Mast Industries, Nichimen, Nissho Iwai, Otto, Sara Lee, Seidensticker, Sumitomo, Tomen, Tommy Hilfiger, Victoria’s Secret, and Wal-Mart.  Three major developments over the past 20 years have led to the industry’s present vibrancy. One was the introduction in 1986 of the so-called Doi Moi economic reforms which notwithstanding the government’s communist leanings gave encouragement to the private sector and allowed market forces to determine the allocation of resources. A second was the collapse of the Comecon (Council for Mutual Economic Cooperation) bloc in 1990-91 and that of the Soviet Union in 1991. These events caused initial hardship but prompted the country to forge links with the West and enter the international community. The third was the granting by the USA of normal trading relations (NTR) or most favoured nation (MFN) status in December 2001, which led to a dramatic reduction in import tariffs in the US market. The future for the textile and garment industry in Vietnam looks promising. Vietnam joined the World Trade Organisation (WTO) at the beginning of 2007 and seems set to build upon its recent export success. Moreover, the Vietnamese government is highly supportive of the textile and garment sector, and there are strong incentives to attract foreign investment. The government has outlined ambitious plans for the industry’s development. If these plans are fulfilled, employment and exports in the sector will double by 2010.