Textiles and Clothing in Vietnam: Riding the Crest of a Wave
The past decade has been momentous for Vietnam’s textile and garment industries as the country has moved from complete state control to a much freer economy—thereby allowing individual entrepreneurs and small companies to thrive. Also, Vietnam’s growing trade surplus in textiles and clothing is bringing increasing prosperity to the country. Between 2001 and 2009 its exports rose 78-fold to reach US$9.1 bn. Today there are more than 2,000 textile and garment companies, employing over 2 mn workers, and textiles and clothing have become the country’s largest industry.
Moreover in the first four months of 2010, garments alone made up 57% of Vietnam’s total exports to the USA.
The industry benefits from low labour costs and membership of several organisations and trading blocs, including the Association of Southeast Asian Nations (Asean), Asean Economic Ministers (AEM) and Asia-Pacific Economic Cooperation (APEC). Moreover, it also stands to benefit from an agreement to create an Asean-China Free Trade Area (ACFTA) by supplying textiles and clothing duty-free to China. Recently, it has benefited in particular from the fact that many of China’s yarn mills have run down their stocks during the recession, and a number of its skilled employees have gone back to working in agriculture. The industry in China also suffers from energy shortages.
But the Vietnamese industry still has some way to go to even approach the success of its counterpart in China. Vietnam is now the second largest supplier of textiles and clothing to the US market. But it accounted for only 6.6% of textiles and clothing imported from all sources in 2009, and its share paled in comparison with the 39.2% share held by China. To improve the situation, the Vietnam Textiles and Apparel Association (VITAS) has recommended that businesses pay more attention to: increasing the value of their products; vertically integrating their textile and garment production in order to reduce the amounts of materials which need to be imported; strengthening ties with US importers; and advertising their products more widely.
Increasing added value may prove difficult without an injection of skills and capital investment into the finishing sector. Also, the Vietnamese textile and clothing industry will have to contend with problems which are already familiar to those in other low cost countries—notably growing wage expectations and the loss of skilled workers to other industries as these start to look more attractive.
Moreover in the first four months of 2010, garments alone made up 57% of Vietnam’s total exports to the USA.
The industry benefits from low labour costs and membership of several organisations and trading blocs, including the Association of Southeast Asian Nations (Asean), Asean Economic Ministers (AEM) and Asia-Pacific Economic Cooperation (APEC). Moreover, it also stands to benefit from an agreement to create an Asean-China Free Trade Area (ACFTA) by supplying textiles and clothing duty-free to China. Recently, it has benefited in particular from the fact that many of China’s yarn mills have run down their stocks during the recession, and a number of its skilled employees have gone back to working in agriculture. The industry in China also suffers from energy shortages.
But the Vietnamese industry still has some way to go to even approach the success of its counterpart in China. Vietnam is now the second largest supplier of textiles and clothing to the US market. But it accounted for only 6.6% of textiles and clothing imported from all sources in 2009, and its share paled in comparison with the 39.2% share held by China. To improve the situation, the Vietnam Textiles and Apparel Association (VITAS) has recommended that businesses pay more attention to: increasing the value of their products; vertically integrating their textile and garment production in order to reduce the amounts of materials which need to be imported; strengthening ties with US importers; and advertising their products more widely.
Increasing added value may prove difficult without an injection of skills and capital investment into the finishing sector. Also, the Vietnamese textile and clothing industry will have to contend with problems which are already familiar to those in other low cost countries—notably growing wage expectations and the loss of skilled workers to other industries as these start to look more attractive.
SUMMARY
INTRODUCTION
TRADE AGREEMENTS
RAW COTTON
PROFILE OF VINATEX (VIETNAM NATIONAL TEXTILE GARMENT GROUP)
Organisational structure
Investment
Strategy
PROFILES OF THREE LEADING PRIVATELY OWNED VIETNAMESE TEXTILE AND CLOTHING COMPANIES: THANH CONG GROUP, THIEN NAM AND VISON YARN SPINNING
Thanh Cong Group
Thien Nam
Vison Yarn Spinning
CONCLUSION
INTRODUCTION
TRADE AGREEMENTS
RAW COTTON
PROFILE OF VINATEX (VIETNAM NATIONAL TEXTILE GARMENT GROUP)
Organisational structure
Investment
Strategy
PROFILES OF THREE LEADING PRIVATELY OWNED VIETNAMESE TEXTILE AND CLOTHING COMPANIES: THANH CONG GROUP, THIEN NAM AND VISON YARN SPINNING
Thanh Cong Group
Thien Nam
Vison Yarn Spinning
CONCLUSION
LIST OF TABLES
Table 1: Vietnam: textile and clothing exports, 2002-09
Table 2: Vietnam: raw cotton imports 2002-09
Table 3: Vinatex joint stock member companies
Table 4: Vinatex joint venture member companies
Table 5: Vietnam: textile and clothing trade surplus, 2002-09
Table 6: Vietnam: textile and clothing imports, 2002-09
Table 1: Vietnam: textile and clothing exports, 2002-09
Table 2: Vietnam: raw cotton imports 2002-09
Table 3: Vinatex joint stock member companies
Table 4: Vinatex joint venture member companies
Table 5: Vietnam: textile and clothing trade surplus, 2002-09
Table 6: Vietnam: textile and clothing imports, 2002-09
