An Indian Textile firm looking to invest in Vietnam textile industry…

A delegation of leading Indian cotton manufacturers and exporters under the Cotton Textiles Export Promotion Council of India (Texprocil) met with executives of Vietnamese companies in HCM City yesterday to seek trade and investment opportunities.

Vo Tan Thanh, director of the Viet Nam Chamber of Commerce and Industry in HCM City, said despite facing many difficulties, the local garment and textile industry achieved good results in the first half of the year.

Its export revenue in the period topped US$6.16 billion, an increase of 30 per cent over the same period last year.

The sector expects to earn an estimated $13.2 billion to $13.5 billion from garment and textile exports this year, surpassing the year's target of $13 billion, he said.

However, to achieve that goal, Thanh said the sector must import a large volume of raw materials, including cotton, from other countries since local sources were unable to satisfy demand.

Amit Ruparelia, Texprocil chairman, said "Viet Nam had emerged as a leading exporter of garments and was constantly on the look-out for high quality cotton textiles including cotton yarns and fabrics."

As one of the world's leading suppliers of textiles and clothing, Indian businesses can supply any kind of raw material used in textile and garment production to Vietnamese partners, he said.

The imports of cotton textiles from India to Viet Nam have more than doubled since 2009, he said, adding that last year Viet Nam spent $50 million to import cotton textiles from India.

Abhay Thakur, Consul General of India in HCM City, said trade between Viet Nam and India had risen sharply in recent years.

Last year it rose by more than 34 per cent over 2009, reaching $2.75 billion. In the first four months of this year, it was worth $1.26 billion and could reach $4 billion by year-end, he said.

"Texprocil has come here not to compete with the Vietnamese industry, but to work in co-ordination with it so that the competitive advantage of both countries is utilized to mutual benefit," he added.

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6/30/2011 | 0 comments

Vietnam textile exports at US$6.16 Billion

The total apparel export turnover in the first half of 2011 is estimated to reach US$6.16 billion, representing a year-on-year increase of 30 percent. the garment and textile sector is expected to fulfill its target of US$13 in export turnover by the end of this year. In the past six months, Vinatex’s revenue saw an increase of 33 percent, thanks to domestic consumption worth VND8,300 billion. This positive sign is attributed to stable export markets that have not been strongly affected by fluctuations in the macro-economy. Apart from the European Union (EU) and Japan, the US is considered Vietnam’s most promising market. Last year, Vietnam earned more than US$6 billion from garment exports to the US market, up 22 percent compared to the previous year.

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6/24/2011 | 0 comments

Is US Textile industry worried about TPP..

The sector opposed Vietnam's inclusion even before discussions began back in March 2010, and now the negotiations are heading into their sixth round later this month, a concerted campaign is underway to negotiate strong textile and apparel rules into the pact.

Textiles is a sensitive industry for the US, and at the heart of concerns are fears that the free trade agreement will not only flood American markets with Vietnamese clothing, but also provide limited opportunities for US yarn and fabric makers.

Specifically, a group of 52 US lawmakers linked to the textile industry this week sent a letter to US Trade Representative (USTR) Ron Kirk calling for tougher rules on Vietnam until it adopts free market principles.

If mismanaged, the agreement could "dramatically shift global trading patterns, displace critical US textile, and apparel jobs and undermine important trade relationships in the western hemisphere that support nearly 2m jobs," they warn.

Nine Pacific Rim nations are formally involved in the multi-lateral trade group, which in addition to the US and Vietnam also includes Brunei, Chile, New Zealand, Singapore, Australia, Malaysia and Peru. There are also plans for ambitious expansion beyond the current participants.

Significantly, not only is the TPP the first regional agreement in which the US is participating in Asia, but its completion will also create one of the world's most important trading blocs.

"Unique challenges"
That said, the US textile industry believes the inclusion of Vietnam presents "unique challenges."

After China, the country is the second largest supplier of textile and apparel to the US, with annual shipments of US$6.3bn. But it has also been expanding its reach into industrial fabrics and other higher-end textiles in recent years.

Like its near-neighbour China, "Vietnam has a large state-owned and subsidised textile sector, an undervalued currency, weak environmental rules and lax intellectual property enforcement," the lawmakers claim.

The country also depends on China for most of its yarns and fabrics, importing $2.2bn of textile components from China in 2009 - which gives rise to fears it offers only limited export opportunities for US yarn and fabric producers.

The US textile industry is campaigning to get the parameters right from the outset, particularly on rules of origin.

"A loophole-free rule of origin that encompasses fibre, yarn, fabric, dyeing and finishing, thread, pocketing and assembly is needed to make sure that any potential agreement is favourable," says Smyth McKissick, CEO of Alice Manufacturing and co-chair of the American Manufacturing Trade Action Coalition (AMTAC).

Until now, the textile and apparel sector has always been treated as an independent chapter under US free trade agreements, and up to this point USTR has given every indication that it will continue this precedent.

"Textiles and apparel account for over one-third of two-way trade between the United States and Vietnam and represent a complex area of US trade policy with unique sensitivities compared to virtually all other industrial sectors," the letter says. "As a result, these products are not suitable for treatment under a generic formula for all manufacturing products."

Suggestions include excluding certain tariff lines altogether, negotiating tariff reductions versus phase-outs, and extended duty phase-down/phase-out periods.

Rule of origin
There are also calls to adopt the basic yarn-forward rule of origin for textiles and apparel under the TPP with no loopholes, also following a precedent set in most recent US trade deals. This requires the yarn and fabrics for qualifying apparel to come from the exporting country or the United States, and that the cutting, knitting to shape and assembly must take place in that region too.

Textile groups want the yarn-forward rule to apply to all textile components in garments, including linings, narrow elastic fabrics, sewing thread and pocketing.

The letter sent to Ambassador Kirk also recommends that customs enforcement rules be strengthened well beyond past agreements, including effective tracking of yarn and fabric inputs.

It concludes: "While the TPP countries, particularly Vietnam, have substantial capability to produce finished textile and apparel goods for export, they have limited ability to consume finished textile products manufactured in the United States.

"A weak textile text could lead to an increase in the US trade deficit and cause the loss of significant textile and apparel jobs in the United States.

Congressman Mike Michaud, chairman of the House Trade Working Group, adds: "These trade negotiations give us an opportunity to address the mistakes of the past and expand economic opportunities for our workers and businesses."

As always there seems to be a conflict between the demands of the US textile industry and US retailers and apparel importers. The latter want a more liberal rule of origin, as well as a "cumulation" rule that would enable exporters in the TPP region to use inputs from any member country and still qualify for tariff benefits.

The next round of TPP negotiations is scheduled to take place in Vietnam from 20-24 June where new US proposals for textile and apparel rules are expected to be tabled.

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6/02/2011 | 0 comments

Vietnam textile industry on a sustainable development

Though the global economy has faced many difficulties during the past two years, the export of Vietnamese textile and garment products has sustained growth.
While most of the countries exporting textile and garment products have seen a decrease in exports, Vietnam has retained an increase.

The textile and garment export value exceeded the target of US$11.2 billion in 2010. In the context of new changes in the global economy, the sector has set a moderate target of US$12.5-13 billion for this year.
To achieve the 2011 target, local enterprises have boost production and exports since early this year. The export turnover is estimated to reach an average of US$1 billion per month. The export value hit a record high of nearly US$1.5 in May.
In the first five months of the year, Vietnam exported textile and garment products worth US$5.1 billion, a year-on-year rise of approximately 36 percent.
After dizzying hikes in fabric prices, prices of cotton and polyester fabric have gone down in May. This has resulted in a reduction in clothing prices. Therefore, apparel companies expect more orders from importers due to the price decrease.
Japanese companies continue to import clothes from Vietnam, in spite of the recent tsunami tragedy, as they have been for the last two and a half years. The export of protection uniforms to Japan has even soared.
At a meeting with Vietnamese textile and apparel companies in early May, Fumio Koyama from the Japan International Cooperation Agency (JICA) said Japanese investors planned to move 30 percent of their textile and garment factories from China to other countries in the next five years, with Vietnam as a favorite destination.
Moving factories from China to Vietnam will enable companies to benefit from the tax exemption regulated in the Vietnam-Japan Economic Partnership Agreement.
Pham Xuan Hong, general director of Saigon 3 Garment Joint Stock Company, which has exported 50 percent of its output to Japan, said Uniqlo - a Japanese fashion retail group and Saigon 3 Company's long-term partner - has asked his company to gradually increase the quantity of clothes sold to Uniqlo and double the quantity by 2015 compared to now.
Besides targeting the regular importers in the US, EU and Japan, Vietnamese textile and garment products are making headway with Russian importers.
International economists said textile and garment production would move from Eastern European countries to Asian countries in 3-4 years. China is presently meeting 70 percent of the clothing demand of the world but is now reducing production.
Economists think this is a good time for Indian, Bangladeshi, Pakistani, Vietnamese and Cambodian clothing manufacturers to expand production and exports.
Taking care of labor

Vietnamese enterprises have now no need to look for importers but they are concerned about worker turnover.
Le Dong Trieu, general director of Gia Dinh Textile and Garment Corporation, said previously enterprises only focused on business growth but now they must focus on sustainable development.
They have agreed to cut profits to raise salaries for their staff and workers, he added.
In addition, they are investing in better technology and management to increase labor productivity.
Saigon Garment Production and Trading JS Company (Garmex) said thanks to good management, productivity of a worker has hiked by US$15 per day this year from US$11 per day last year.
The average monthly salary of a worker of Gia Dinh Corporation is currently VND4 million, while it was VND3.2 million in 2010.
The figure is VND4.5-5.5 million for workers of Saigon 3, Garmex and Legamex companies.
To maintain sustainable growth in textile and garment industry, enterprises are now taking good care of their workers and ensure them a stable income.

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5/30/2011 | 0 comments