Vietnamese Textile Industry: Can Foreign Investment Report Fill In Capacity?

< p > as the second largest supplier of imported garments in the United States, Vietnam's textile industry is largely dependent on imports because of its lack of local productivity. Such an industrial structure is extremely vulnerable to the instability of its downstream production and makes it difficult for Vietnam to enter the ranks of textile power.

So, can the localization of Vietnamese textile raw materials be realized in the short term? What are the favorable conditions that will promote the productivity of textile industry in the upper reaches of Vietnam? What factors will restrict its development? < /p >

< p > < strong > < a > href= > http://sjfzxm.com/news/index_f.asp > > Industry > /a > upstream production is increasingly weak. < /strong > /p >

Less than two years ago, the Vietnamese textile and Garment Association (Vitas) put forward the development plan of the P, and proposed that before 2020, Vietnam would become the top three target of global garment export.

Up to now, the supply of local raw materials and accessories in Vietnam's textile industry still can only meet 48% of the demand. With the rise of the export of clothing terminal products, the upstream product gap of Vietnam's textile industry continues to increase.

According to the Vietnam Textile Association, imports of raw materials for textile industry in the first half of this year amounted to US $5 billion 900 million, an increase of 23.3% over the same period last year.

In order to meet the export target of $13 billion ~135 billion in the second half of the year, it is expected that the import of its raw materials will continue to increase.

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< p > the disadvantages of Vietnam's textile industry, such as backward technology, low labor productivity, and only processing and production, are the limitations.

At present, 90% of Vietnam's fabric products need to be imported, and the textile fabrics produced by domestic enterprises can only meet 20% of the local market demand. In addition, the domestic textile printing and dyeing mill can only meet the printing and dyeing needs of 10%~15%, and the self-sufficiency rate of textile machinery and equipment is about 20%.

At the same time, the size of Vietnam's garment supporting industry is small, and the number of enterprises is small and scattered.

In order to enhance the competitiveness of the industry, Vietnam National Textile Association encourages Member enterprises and foreign direct investment enterprises (FDI) to increase investment in fabric and fabric production so as to create a complete supply chain.

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< p > < strong > < a > href= > http://sjfzxm.com/news/index_z.asp > > /a > > FTA attract foreign capital < /strong > /p >

< p > in order to solve the problem of weak production supporting capability in the upstream industry chain, on the one hand, the Vietnamese government has made clear the attitude of encouraging investment in the field of textile and clothing; on the other hand, with the continuous advance of the p Pacific Partnership and free trade agreement (TPP) and the Vietnam EU free trade agreement (FTA), the attraction of Vietnamese textile industry has been enhanced, while foreign capital enterprises will pay more attention to Vietnam under the consideration of cost pressure.

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< p > in June this year, the Korean East day group started construction of its first textile factory in Vietnam.

The first phase of the project is US $52 million and is expected to be operational in mid 2015.

At that time, hundreds of job opportunities will be provided, and 9000 tons of fiber will be produced annually, and the products will be sold to the Asian market.

Coincidentally, the Japanese YAGI company has also started manufacturing operations in Vietnam since this spring.

Through the borrowing of various equipment and the signing of special production line contracts, two production lines have been opened up in Haiphong and Hu Zhiming.

Another Japanese enterprise, Tsuen Ju Kok, has 8 fabric bases and 20 sewing sites in Vietnam to expand its sewn sites. At the same time, the company has recently increased the production of synthetic fibers, cotton and all kinds of composite materials.

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Textile enterprises in Japan, Korea and other countries continue to increase investment in Vietnam, which undoubtedly promotes the output of textile fabrics and raw materials in Vietnam at the macro level. However, the answer to the question of whether it can fundamentally improve the production capacity of raw materials in the country and promote the technological upgrading of local enterprises remains to be solved. P

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< p > < strong > lack of support for local high and new technology < /strong > /p >

P Vietnam's Xigong Daily reported that in recent two years, foreign direct investment enterprises favor investment in labor-intensive industries, but these foreign enterprises have not promised to pfer technology, nor have they supported them in large-scale industrial development projects.

In fact, in the field of textiles, the production inputs of these advanced technology enterprises are still dominated by processing. Most of their products are supplied to the export market, and the core of technology is not shared with Vietnamese local textile enterprises.

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In Vietnam, P is the best supplier in the global supply chain of textile industry, such as cotton planting, spinning, weaving, dyeing, garment processing and marketing.

Because of the backward production technology, Vietnam textile enterprises can not undertake many complex orders.

Compared with the surrounding countries and regions, the proportion of high-tech applications in Vietnam increased slowly.

In the textile industry, the proportion of high-tech applications is even lower than that of Ethiopia.

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"P >" for this reason, Vietnam's Ministry of industry and commerce, vice minister Sheng Hai said that the most effective way to promote the industry's self-sufficiency rate of raw materials is to strengthen domestic investment. Only by upgrading local industries can we fundamentally solve the development dilemma of the industry.

However, industry experts pointed out that at present, the lack of loan incentive mechanism and other factors still constrain the development of enterprises. This is also the main reason why textile manufacturers have not actively carried out technological innovation for many years.

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< p > < strong > financing difficulties constraining enterprise development < /strong > < /p >

< p > in Vietnam, corporate financing is still a big problem.

The results of the survey released by the General Administration of statistics show that 23% of the enterprises unable to apply for loans think that the procedures for applying for loans are too complex and take too long. 14.4% of the enterprises are due to no property mortgage, 7.8% are unable to meet the bank's requirements of their own assets standards, and 6.4% enterprises are required to pay fees other than interest, so they are unwilling to apply for bank loans.

A lot of stringent loan qualification audit results in 50% of enterprises unwilling to apply for bank loans to expand the scale of production and operation, and for textile and garment enterprises, they can only continue to undertake OEM orders without much investment.

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< p > besides the high threshold of audit, the excessive financing cost has also reduced the competitiveness of Vietnamese textile enterprises to a certain extent.

Although Vietnam's exporters enjoy 8%~10%'s 1 year lending rate, their borrowing costs are 1.4~2 times the cost of other countries in the region.

The 1 year lending rates of Malaysia and Thailand export enterprises were 4.9%, 6.6% and 6.9% respectively.

When Vietnamese local enterprises compete with foreign enterprises in the domestic market, this is a huge disadvantage.

Because the US, Japan, South Korea and Thailand are paying more than 1.5%~4.7% of the loans they invest in direct investment companies.

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< p > the new market environment and industry development path have forced Vietnamese textile industry to enhance local production capacity. However, from technical support to financing difficulties, the localization of the industry still needs the support of the government and industry, and the determination of the coordinated development of the upstream and downstream industry chain.

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