New trade agreements resulting in textiles sector becoming a popular destination for foreign investments.
In the first seven months of this year the textile sector has attracted the second-highest amount of foreign direct investment (FDI) capital, with $1.12 billion, or more than 20 per cent of the total flowing into the country.
According to the Foreign Investment Agency under the Ministry of Planning and Investment, the three largest projects included one producing and processing fiber, owned by Turkish investors in southern Dong Nai province with total investment of up to $660 million, which was the highest investment ever. It was followed by a project producing support products for the textile industry, invested by Polytex Far Eastern Co. from Taiwan with $274 million, and a project of the Lu Thai yarn factory, owned by a Hong Kong investor, with investment capital of $160.8 million.
Many experts believe that as Vietnam's garment sector has improved its strengths over recent years more FDI has come as a result. Vietnam has also signed on to eight trade agreements, including those with major countries such as the US, Japan, South Korea and the EU, which are all key textile export markets for the country.
Analysis from the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade showed that textile export turnover to the EU is only some $300 million a year but when the EU - Vietnam Free Trade Agreement takes effect it may grow by some 50 per cent in the first year and 20 per cent annually in subsequent years. And if the TPP is adopted Vietnam's textile exports to the US will hold greater competitive advantages.
From such free trade agreements Vietnam's textile sector is quickly becoming a destination of potential for foreign investment.