The Future Of Vietnam'S Textile Industry Depends On Clothing Exports.

Only when textile enterprises may take them

Almost all the materials used in Vietnam's clothing industry are imported.

According to VuDucGiang, President of the Vietnam textile and clothing association (Vinatas), Vietnam is trying to limit foreign direct investment in the garment industry (FDI) in Vietnam's textile and garment industry development strategy, and has been attracting more attention.

The strategic objective is very clear: Vietnam hopes to gradually reduce its dependence on imported fabrics and materials.

However, after many years, Vietnam still can not do this.

The director general of Vietnam textile and Apparel Group (Vinatex) said that in the past 7 years, the export volume of textiles and clothing products increased by three times, from 4 billion 300 million to 13 billion US dollars.

However, during that time, the output of cloth increased by only two times to 1 billion 200 million square meters.

At the same time, imports of fabrics have been steadily increasing.

According to Vinatex reports, Vietnam exported $6 billion 160 million of textiles and clothing products in the first 6 months of 2011, while imported 5 billion 700 million dollars of materials.

In this amount, fiber imports are worth 800 million US dollars, and the rest of the money is spent on imported fabrics.

The fabric price is about 2.2-4.5 US dollars / square meter. It is estimated that Vietnam imported billions of square meters in the first half of 2011.

For a long time, it has been considered that the high investment rate and low return rate of investment capital are the biggest obstacles to the development of the textile industry.

However, this is not the most important reason.

Under normal circumstances, a textile factory with an annual capacity of 10 million square meters will need us $15 million to invest in capital. For Vietnamese companies, this investment is not too big.

Analysts pointed out that the biggest obstacle to the development of the textile industry is the export pattern of the garment industry and the weakness of the textile industry.

Technology upgrading or joining the global value chain?

At present, Vietnam's clothing companies mostly do outsourced business for foreign companies or export products in FOB mode (Vietnamese companies buy materials and sell products).

Under these two circumstances, Vietnamese companies design and produce products according to the importers' supply.

Therefore, they have to make use of raw materials purchased from abroad, from fabrics to main materials to other materials and accessories.

Therefore, Vietnamese textile enterprises do not have much opportunity to sell their products to clothing companies, while clothing companies need materials to fulfill orders.

The second problem that makes Vietnamese textile products unsalable is the low quality of products.

Experts affirmed that the backward equipment and machinery used in the textile industry should be blamed.

Many companies are importing modern machines from Europe, but the attraction of their products is still not as good as that of Korea or Taiwan.

The key here is the technical know-how that Vietnam still does not have.

LeTienTruong, managing director of Vinatex, said that clothing companies are trying to export products in accordance with ODM mode, which means selling products designed and manufactured in China.

He said that the export of Vinatex company in accordance with ODM mode has reached 5%, which should be an encouraging result.

It is hoped that this proportion will increase to 15% by 2015.