10:04 | 29/05/2015 Economy
(VEN) - On the 40th anniversary of the liberation of the south, the Quang Nam Province People’s Committee awarded investment certificates to 12 companies with a total capital of nearly US$550 million, or VND1.69 trillion. Seven out of the 12 licensed projects are in the textile sector.
Foreign investors are interested in Quang Nam’s textile sector
On March 25, the Vietnam Textile and Garment Group (Vinatex) under the Ministry of Industry and Trade, held a groundbreaking ceremony for the construction of a fiber-weaving and garment-dying complex in Que Son District, Quang Nam Province. The project has a total investment of VND1.2 trillion and will be completed within two years. The complex is expected to generate about VND2 trillion annually in revenue, export about US$40 million in goods per year, and employ more than 2,000 workers.
The Hoa Tho Textile & Garment Joint Stock Corporation has begun to construct its seventh 20,000-spindle plant in Binh Phuc Commune, Thang Binh District, Da Nang with total investment of more than VND250 billion, which is scheduled to be completed by 2016 as part of the corporation’s close production process plan.
In addition, two foreign textile investment projects are also underway including the US$30 million textile manufacturing complex invested in by the Republic of Korea-based Panko Textile and Garment Group in Chu Lai Open Economic Zone, and the US$6 million garment manufacturing plant invested in by the Republic of Korea-based One Woo Company in Ha Lam-Cho Duoc Industrial Complex.
According to Deputy Head of the Quang Nam Investment Promotion and Enterprise Support Agency (Quang Nam IPA) Vo Van Hung, since the beginning of the year, many domestic and foreign investors from the Republic of Korea, China, and Chinese Taipei have visited Quang Nam to research and implement textile investment projects. Quang Nam IPA have signed memoranda with around ten foreign investors in the field of textiles and garments for export.
The most recent garment and textile investment projects are large-scale, and several of them aim to provide fiber materials for domestic producers. For example, the Republic of Korea-based Rio Industries Co. Ltd’s polyester and nylon yarn production project in Tay An-Duy Xuyen Industrial Complex has a total investment of US$6 million and an annual capacity of 4,440 tonnes of yarn, which is scheduled to enter operation by 2016.
Experts have warned that with such a large number of textile projects being set up here by China, the Republic of Korea and Japan, Vietnam must implement waste water control systems to protect the environment.
According to experts, the wave of investment in the domestic garment and textile sector stands to reason as Vietnam is preparing to officially join the Trans-Pacific Partnership (TPP). However, in order to enjoy tax incentives from this agreement, domestic garment and textile exports must abide by the “Yarn Forward” rule of origin – that is that all related materials and manufacturing processes must be done in TPP countries. Meanwhile Vietnam’s garment and textile sector has to import 90 percent of its raw materials mainly from China, a country outside the TPP bloc.
Notably, Quang Nam, as a large province in the central region with open investment incentives and abundant labor resources, is considered ideal for both domestic and foreign investors.
By Tran Minh Tich