Two parties sign agreement over dyeing and materials production.
Japanese trading firm Itochu and the Vietnam National Textile and Garment Group (Vinatex) have signed a framework agreement on business cooperation to implement new investment projects in dyeing and materials production in Vietnam. The framework agreement was signed after Itochu's subsidiary company, Itochu Textile Prominent in Asia, poured over $9 million into buying 5 per cent of Vinatex in the initial public offering (IPO) held last October. The aim of its investment in the chain of material projects is to bolster Vinatex's initiative in material production and also expand trading projects in dyeing and materials in Vietnam. The project's products will initially serve enterprises within the group.
Mr. Shimizou Motonari, General Director of Itochu Textile Prominent in Asia said that Vietnam is an important country in Asia for investing in garments and textiles, especially when free trade agreements (FTAs) and the Trans Pacific Partnership (TPP) will take effect. As both a shareholder and year-long business partner of Vinatex, Itochu will conduct cooperation projects between member companies of the two sides. These projects are expected to bring in total revenue of $60 million over the next five years and create thousands of new jobs in Nghe An and Quang Binh provinces, where the projects will be implemented. The two sides haven't disclosed the total investment for these projects but it seems certain to be in the hundreds of millions of dollars.
Mr. Le Tien Truong, General Director of Vinatex, expected that its cooperation with Itochu will see it expand its markets, invest in advanced technologies, and create materials for the group as well as for the national garments and textiles industry.
Itochu is the first besides Japanese financial institutions to invest in Vinatex, a major State-owned enterprise in Vietnam and doing business with 100 Vietnamese garment and textile companies. The group deals with diversified items, from raw materials to fashionable garments, in Japan, the US and Europe.
It is forecast that total export turnover of Vietnam to Japan in 2015 will continue to be healthy, perhaps reaching $2.9 billion, a 9 per cent increase compared to 2014.