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Future bright for textiles & garments

Released at: 13:31, 31/10/2015

Future bright for textiles & garments

Workshop hears of Vietnam's potential to become one of the world's largest producers and exporters.

by Minh Tuyet

By 2050 Vietnam is expected to be the second-largest textiles and garment exporter, up from its current position of fifth, Chairman of the Vietnam Textile and Garment Association, Mr. Vu Duc Giang, told the "Stock Market by the end of 2015 - Opportunities for Shares in Textile and Garment Sector" workshop at the Hanoi Stock Exchange (HNX) on October 30.

Textile and garment exports were previously targeted to reach $30 billion by 2020 but this year stood at $28 billion, recording growth five-times faster than the government’s plan. “The Association predicts that by 2020 the figure will be $50 billion to $55 billion,” Mr. Giang added.

The sector has been a bright point in Vietnam’s stock market as the year draws to a close, with well-performing shares including TCM (Thanh Cong Group), TNG (Investment Corporation and Trading TNG), STK (Century Synthetic Fiber Corp) and G20 (G.Home Textile), Deputy Director of the Research and Analysis Department at VietinBank, Mr. Dang Tran Hai Dang, said in the workshop. “The sector is considered to have potential to grow thanks to benefiting from free trade agreements,” he explained. The sector is actually performing better than the VN-Index.

Mr. Giang said Decree No. 60, issued recently by the government, urges Vietnamese enterprises to list on the stock market. State-owned enterprises, after completing their IPO, are required to register with the State Securities Commission (SSC) for listing. “A number of famous Vietnamese textile and garment enterprises are to be listed, such as the Viet Tien Garment Joint Stock Cooperation, the Garment 10 Corporation, the Nhabe Corporation, and 28 Corporation,” he said.

Textiles and garments has attracted about $3.5 billion in foreign investment and this will grow much higher after a number of textile and garment enterprises list. “The textile and garment sector has seen sustainable development and become a ‘hot’ sector for investment,” said Ms. Nguyen Thi Hoang Lan, Deputy Chairwoman and Deputy CEO of HNX.

“Vietnamese textile and garment enterprises rarely appear in the media, instead quietly going about their investment,” Mr. Giang said. The Viet Tien Garment Joint Stock Cooperation, for example, has invested in about ten projects over the last two years or so, while Vinatex has invested in 13 projects in the same timeframe.

The “yarn forward” rule in the TPP on input materials for the sector is being gradually addressed by Vietnamese enterprises. Mr. Giang explained that, by 2018, the localization rate in Vietnam’s textile and garment products will reach some 70 per cent.

Since the beginning of the year Vietnam has seen foreign investors buy around $209 million worth of shares, Mr. Dang said. Meanwhile, foreign investors has sold around $1 billion and $3 billion worth in Indonesia and Thailand, respectively.

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