VietNamNet Bridge – A new wave of foreign investments in spinning, weaving
and dyeing sectors has been kicked off, since investors can see the profits they
can gain from the Trans-Pacific Partnership Agreement (TPP), according to the
Vietnam Cotton and Spinning Association (VCSA).
In fact, experts have warned about the challenges Vietnam has to face when
negotiating the issues relating to the textile and garment sector. Especially,
the US side may put forward the principle of product origin, which is believed
to put big difficulties for Vietnam.
Nevertheless, experts say that if the involved parties can harmonize their
benefits through negotiations, TPP agreement would bring big opportunities to
many Vietnamese sectors which Vietnam has big advantages. Especially, big
opportunities would be opened in the spinning, weaving and dyeing: TPP would not
only help boost exports, tax reductions, but also create a firm driving force
for the investment and development.
Nguyen Son, Deputy Chair of VCSA, said TPP would give the reason for the
enterprises in the sectors to increase the productivity. At the meetings with
VCSA’s representatives, some Chinese enterprises revealed that they were
considering the possibility of expanding business or making new investment
projects in the spinning industry.
Investors still can see great potentials in the sectors in the economic crisis
period, which explains why more foreign direct investment (FDI) projects have
still been granted licenses recently.
Kyung Bang Vietnam, a 100 percent South Korean invested enterprise, has spent 40
million dollars to implement the first phase of the project on the spinning
factory with the capacity of 6000 tons per annum in the Bau Bang Industrial Zone
in Binh Duong province.
Some other investors are following necessary formalities to be able to start the
construction of their factories in Vietnam. One of them is Hong Kong’s Texhong
Company which would build a spinning factory with the estimated investment
capital of 300 million dollars in the Hai Yen Industrial Zone in Quang Ninh
province.
The Vietnam Textile and Garment Group (Vinatex) has also joined forces with
Japanese Itochu to set up a joint venture to run a 50,000 spindle factory,
capitalized at 120 million dollars in the Bao Minh Industrial Zone in Nam Dinh
City. It is expected that the project would kick off by the end of the year.
Virginia Foote, Chair of the US-Vietnam Trade Council USVTC, said Vietnam should
take initiative to attract FDI into the textiles instead of sitting and waiting
for South Korean, Japan and China to join TPP to ensure the principle of product
origin.
The big textile factories are mostly located in South Korea, Taiwan, China and
Japan. Therefore, in the immediate time, Vietnam needs to increase the export
turnover in order to persuade the investors in South Korea, China and Taiwan to
relocate their factories to Vietnam.
A research work of Professor Peter A.Petri from the US Brandeis University
showed that when joining TPP, smaller economies such as Chile, Peru and Vietnam
would see the biggest income growth rates. Vietnam may see the GDP reaching 235
billion dollars by 2025. Meanwhile, garments and textiles may bring the export
turnover of 28.5 billion dollars by 2025.
How the Vietnamese textile and garment industry can benefit from TPP would still
depend on the negotiation results. However, Ngo Chung Khanh, a senior official
of the Ministry of Industry and Trade, said that Vietnamese enterprises need to
take initiative to build up the strategies to access the TPP-member markets
right now.
Source: TBKTSG