Want to be in the loop?
subscribe to
our notification
Business News
JAPANESE CAPITAL CONTINUES POURING INTO TEXTILE AND GARMENT
Japanese firms are scaling up investment into Vietnam’s textile and garment sector to take advantage of the huge market potential and Vietnam’s new-generation free trade agreements.
Several months ago, leading Japanese general trading company Itochu bought an additional 10 per cent stake in Vietnam’s state-owned textile and garment conglomerate Vinatex, bringing its ownership to approximately 15 per cent.
The deal took place at a time when only two out of 11 members had approved the landmark Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
After the deal was struck, Itochu became Vinatex’s second-largest shareholder behind the Ministry of Industry and Trade which, on behalf of the state, currently manages a 53 per cent stake.
Now the number of CPTPP signatories has reached seven, with Vietnam being the most recent country to have approved the deal.
Itochu’s move suggests that the group has accurately forecasted the CPTPP development journey and the textile and clothing sector’s remarkable advantages to avail themselves of the opportunities from the deal in the years to come.
The Japanese group’s apparel exports from Vietnam are worth about VND12.84 trillion ($558 million) per annum, with about half of this produced by Vinatex.
The company aims to boost processing volume and scale up its export value to $878 million by 2021.
With around 30 plants in operation, Sakai Amiori, another firm coming from Japan’s Fukui prefecture, has opened an export apparel production plant based in Phu Ha Industrial Zone (IZ) in the northern province of Phu Tho.
The plant finished construction in April 2017 and now sees stable production and exports.
Another Japanese firm, Matsuoka Corporation, first set foot in Vietnam in 2014 and quickly expanded production to raise capacity by 6-7-fold through the Matsuoka Phu Tho plant, which mainly produces apparel items carrying the Uniqlo brand to be exported back to Japan.
As a partner to leading global apparel brands like Uniqlo, Tore, and Korabu, Matsuoka Corporation generates an annual revenue touching $530 million, taking the lead in Japan and the 11th worldwide.
The company operates an expansive network of 17 plants across Asia and has chosen Vietnam for capital injection and production expansion in recent years to take advantage of the opportunities anticipated to be brought by new-generation free trade agreements (FTAs) such as the EVFTA and the CPTPP.
After its first plant coming online in 2016, the second plant began production in last August, with an annual capacity of about two million products.
The company has further invested in an apparel plant complex with an investment value surpassing $16 million and annual production capacity of seven million products.
By the end of this year, the complex is expected to create jobs for more than 2,500 local labourers.
The influx of foreign direct investment continuing to flow into export-oriented sectors like textiles and clothing has the dual benefits of helping to boost the sector’s capacity and turning Vietnam into a global manufacturing base.
A look into the textile and clothing sector’s export-import performance from 2010 until present shows that the sector has posted a constantly-growing trade surplus, going from a mere $2.9 billion to $12.7 billion last year, along with a 13.8 per cent jump against 2016.
According to Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, in the first 11 months of this year, the sector’s export value came to $30 billion and trade surplus surpassed $13 billion.
Source: VIR
Related News
VIETNAM’S GDP TO GROW 5.5% THIS YEAR – WB
This forecast is based on the assumption of a moderate recovery in manufacturing exports in 2024, fueled by rebound growth of 8.5% year-on-year in the fourth quarter of 2023 and 17.2% year-on-year in the first quarter of 2024, reflecting strengthening global demand, said Dorsati Madani, senior country economist at the WB in Vietnam.
FARE REFUND FOR VISA REJECTION
Cathay Pacific will offer full refunds for cases of visa rejection to provide you with the confidence to explore the world with ease. If you are planning to fly to a destination that requires an entry visa, you can now book with greater peace of mind.
FOUR COMMODITIES POST Q1 EXPORT VALUE OF OVER 5 BILLION USD
The total export turnover of agricultural, forestry, and fisheries products in the first three months of 2024 is estimated to reach 13.53 billion USD, an increase of 21.8% compared to the same period of 2023.
MOIT PROPOSES SCHEME TO BOOST RENEWABLE ENERGY PROCUREMENT
The proposed Direct Power Purchase Agreement (DDPA) mechanism, outlined in the draft decree, targets organisations and individuals consuming electricity from the 22kV power grid or higher, with a monthly consumption averaging 500,000kWh. However, residential households are excluded from direct procurement.
REAL ESTATE BONDS PLACE PRESSURE ON ISSUING FIRMS
The ministry’s recent report underscores concerns within Vietnam’s corporate bond market for 2023 and 2024. It emphasizes the critical need to address hindrances to the real estate sector in line with the objectives provided in Government Resolution No. 33/NQ-CP, which aims to stabilize the industry.
DA NANG CUSTOMS FOCUSES ON DEVELOPING CUSTOMS-BUSINESS PARTNERSHIPS
Da Nang Customs Department issued an action plan for developing customs-business partnership in 2024. One of the new events this year is the workshop on “Settlement reports for enterprises engaged in outsourcing, export production and export processing” held in Da Nang Customs Department on April 16, 2024.