Vietnam Textile and Garment Industry

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An Overview of Vietnam textile Garment industry

• Prepared by

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Content
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Country Overview
Surface Area
331,210 square kms
South-Eastern Asia
Region
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Glimpse on Vietnams TC Industry
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Facts about Vietnams TC Exports
FACTS
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Year wise TC exports from Vietnam
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Country wise TC Exports from Vietnam
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Country wise Export Share (in )
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Vietnam TC Exports(Current Scenario
Expectations)
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Trade Agreements of Vietnam
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Trade Agreements of Vietnam
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Trade Agreements of Vietnam
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Investment procedure in Vietnam
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Investment procedure in Vietnam
Investment by way of establishment of a new legal
Entity
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Investment procedure in Vietnam
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Investment procedure in Vietnam
Investment by acquisitions of shares/capital
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Logistics scenario in Vietnam

• There are around 100 ports throughout the
  country. Major ones are located in Hai Phong, Da
  Nang and Ho Chi Minh City.

• Vietnams Liner shipping connectivity Index
  (LSCI) is 46.4. It is higher than some neighbors
  such as Cambodia, Indonesia, Philippinesand
  Thailand.

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Logistics scenario in Vietnam
New Ports Coming in
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Growth prospects of the industry

• The rapid rise of FDI in Vietnams textile and
  cpparel industry makes it an attractive
  destination in Asia for textile investment. The
  FDI in this sector accounts for 21 of the
  countrys total FDI.
• Around 123 investment projects have been
  registered in Vietnam by Chinese investors in
  initial months of 2017. Out of them, one of the
  largest is of US 220 million i.e. a Vietnam
  polyester synthetic fiber plant in central Tay
  Ninh province.
• In early 2017, South Korea has committed an
  amount of US 2 billion capital investment in
  Vietnams textile and garment industry.
• Vietnam has upper hand in high-value products and
  exports of these products are continuously
  rising.

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Challenges faced by the TC Industry

• As most of the Vietnamese manufacturers produce
  for foreign brands, their production and profits
  are affected by global economic fluctuations.
• The industry depends highly on the import of
  machinery equipment, raw materials and
  accessories. As a result, their profit margins
  are reduced and their manufacturers become
  vulnerable to foreign cost fluctuations.
• Rising cost of electricity, transportations and
  an increase in minimum wages are leading to an
  increase in textile production cost in the
  industry.

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Challenges faced by the TC Industry

• The country faces tough competition from Cambodia
  and Bangladesh, as their labour wages are lower
  than that of Vietnam.
• A large number of garment manufacturing factories
  works as OEM/ODM enterprises for foreign players.
  These are all established manufacturers and big
  brands prefer them only. As a result, the
  industry becomes tough for the new entrants
  especially for small-scale enterprises.
• The technological advancement and capital
  richness of foreign companies in Vietnam makes
  the locals suffer.

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Initiatives taken by the Government

• To overcome the high cost of raw materials, the
  government had started investment plans in this
  segment long back. As a result, in 2006-2015, the
  country was the second biggest investor in the
  development of shuttle less looms and the biggest
  investor in ring spindles and open-end rotors,
  amongst the ASEAN countries. 
• The Government has given a push to enhance
  value-adding capabilities of the apparel
  manufacturers, develop their own brands, become
  original design manufacturers (ODMs) rather than
  function only as subcontractors.
• With the establishment of cotton manufacturing
  units in Rang Dong Industrial Park having a
  production value of US 3 billion on an annual
  basis, the country has shown a remarkable growth
  in knitting sector.

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